AARP: 2009 COLA Offers a Much-Needed Financial Infusion for Retirees

Source: AARP Press Center

October 16, 2008

Contact: Danielle Holland, AARP, 202-434-2560, dholland@aarp.org

Washington, DC - AARP Legislative Policy Director David Certner offered the following statement in advance of the anticipated announcement tomorrow of the 2009 Cost of Living Adjustment (COLA). In addition, AARP released an assessment on how the COLA could impact the millions of Americans who currently rely on Social Security as their primary means of retirement income.

Certner’s statement follows:

“In this time of economic uncertainty, Social Security remains a stable and reliable source of retirement income for 34 million Americans. It continues to provide financial peace of mind for older Americans who far too often are struggling to make ends meet in this economy.”

“As the global markets continue to fluctuate wildly, the retirement savings of millions of Americans are put in jeopardy. As the costs of everyday living expenses continue to rise, people living on fixed incomes have been among those hardest hit by the financial crisis. Unfortunately, this COLA increase will not completely ease their burden. While the COLA is larger than in recent years, so are costs for food, energy and health care. But in a time when every dollar counts, any increase in income is a welcome development.”

“The Presidential campaigns have recently proposed several ideas to fix the economy, including a temporary freeze on mandatory IRA and 401(k) plan withdrawals, which AARP supports. However, the need for relief for risk related retirement accounts merely underscores the critical role Social Security plays in Americans’ retirement security. Further, given the recent market volatility, Americans -- both retired and working – should breathe a sigh of relief that their Social Security benefits are not also subject to the volatile stock market. The results of such a gamble could have been catastrophic to the millions who are in or near retirement.”

“The guarantee of Social Security remains the bedrock of financial security for millions of Americans not only in retirement, but also those with retirement plans on the horizons. Now more than ever, people are seeking stability and confidence for their financial future. Social Security is a promise that must be kept for current and future generations.”


FACT SHEET:
Social Security as Primary Retirement Income

General Population
• 31 million individuals (86.4%) received Social Security payments in 2007

Women
• Without Social Security benefits half of older women would be in poverty.
• In 2005, 91.6 percent of older white women, 83.2 percent of older African American women, and almost 73.9 percent of older Hispanic women received Social Security benefits.

Hispanics
• 75 percent of Hispanics receive Social Security and is their single largest source of retirement income
• 80 percent of Hispanics age 65+ who receive Social Security depend on Social Security for 50 percent or more of their income
• 85 percent of Hispanic women 65+ depend on Social Security for at least half or more of their income; more than 50 percent depend on it for 100 percent of their income

African Americans
• 82.6 percent of African Americans age 65 and older receive Social Security
• Nearly 80 percent of African Americans depend on Social Security for 50 percent or more of their income, and 44.3 percent depend on it 100 percent of their income

AARP
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