All Posts in "Personal Finance/Consumers"

As Congress struggles to ensure Social Security is fully funded far into the future, it will have a new problem to deal with. If President Trump carries out his vow to deport all illegal immigrants in the U.S., Social Security will face a more significant deficit.

Studies by think tanks and the Congressional Budget Office have shown the Social Security Administration (SSA) receives billions each year from an unexpected source: Legal and illegal immigrants. Some economists project a broad drag on the economy as a result of Trump’s actions — and it could cost Social Security roughly $20 billion in cash flow annually, according to actuaries at the SSA, which sends benefits to 68 million Americans each month, totaling $1.5 trillion last year alone.

Foreign-born workers in the United States contribute to Social Security at the same tax rate as everyone else but have lower predicted Social Security benefits than native-born Americans because, on average, they earn lower lifetime wages and have fewer years of employment that count toward their calculated benefits.

In addition, recent trends suggest that foreign-born workers are increasingly returning to their home countries to retire. As a result, many who pay into the Social Security system during their working years may not be eligible to receive benefits because non-residents can only do so under certain circumstances. Foreign-born contributors can generate net gains for the Social Security trust fund by not fully drawing benefits. 

As far as illegal immigrants are concerned, in 2022, they contributed $25.7 billion in Social Security taxes, typically by working under borrowed or fraudulent Social Security numbers. Unauthorized immigrants, however, are ineligible to claim Social Security benefits. Source: The Senior Citizens League, a non-profit advocacy organization supporting older adults’ benefits.

The Senior Scene by — March 12, 2025 in Personal Finance/Consumers

Military retirees and disabled veterans will receive 2.5 percent increases to their monthly paychecks for 2025, thanks to the annual cost of living adjustment (COLA) that’s tied to inflation.

While that may look low compared to recent years’ adjustments of 3.2 percent in 2024, 8.7 percent in 2023, and 5.9 percent in 2022, it’s still close to the average of about 2.6 percent for the past decade.

The U.S. Department of Labor determines the annual COLA by measuring the Consumer Price Index, or CPI, a measurement of a broad sampling of the cost of consumer goods and expenses. The CPI is compared to the previous year; if there is an increase, there is a COLA. If there is no increase, there is no COLA, and benefits remain the same — they don’t decrease. For 2025, retired military members will receive a $25 increase for each $1,000 of military retirement pension they receive each month.

Retirees who entered military service on or after Aug. 1, 1986, and opted for the Career Status Bonus (CSB/Redux retirement plan) will have any COLA increases reduced by a percentage point, so they will receive a smaller increase of $15 per $1,000 in 2025. Recipients of Survivor Benefit Plan payments will receive increases to their payments by the same amount as retirees.

Service members who retired in 2024 will receive a slightly reduced COLA in 2025. Their COLA is prorated based on which quarter they retired in (January-March, April-June, etc.). The prorated amount may also be adjusted based on when a member entered the service and which retirement plan they elected.

Disabled veterans will also receive increases to their benefit payments in the upcoming year. Department of Veterans Affairs (VA) disability checks will go up about $4.28 per month for those with a 10 percent rating and $93.45 for those rated at 100 perent who don’t have dependents.

Meanwhile, the VA has announced its 2025 Veterans Pension income limits. The new limits change veterans’ individual rates. The actual amount paid depends on a veteran’s income; the pension payment makes up the difference.

Veterans of wartime service who are 65 or older and on a limited income may qualify for a veteran’s pension without being disabled.

More information is available at military.com.

The Senior Scene by — February 20, 2025 in Personal Finance/Consumers

By Marguerite Ro

Medication doesn’t work if you can’t afford it, and too many Washingtonians continue to struggle to fill prescriptions because of their cost. But that’s about to change for some.

A new law goes into effect on Jan. 1, 2025 for people with a Medicare prescription drug plan, capping out-of-pocket Rx expenses at $2,000 per year. An estimated 42,000 Washington seniors will see these new savings, an average of $1,500 in 2025, and that number will steadily increase over time.
It’s a victory we all share. Thanks to the unwavering dedication of AARP members across the country who have worked hand in hand with AARP’s efforts, we succeeded in passing a prescription drug law in 2022. Your stories and your voices made a difference. We couldn’t have done it without you. 

Between 3 and 4 million Part D plan enrollees nationwide are estimated to benefit from the new out-of-pocket cap every year between 2025 and 2029, according to a report published by AARP.

A 2023 survey from AARP shows that 60 percent of older adults are very or somewhat concerned about being able to afford the prescriptions they or someone in their family need. Rising drug prices have left some older adults with no choice but to skip doses or go without needed medication altogether.
AARP fought tirelessly for the prescription drug law because we knew it would bring much-needed relief to Medicare enrollees trying to keep up with rising costs for everyday essentials like housing, groceries, and utilities. This law is a step toward easing that burden.

Limiting out-of-pocket expenses for medication is just one part of the 2022 law.  It also makes many important vaccines, such as shingles and pneumonia, free. It limits insulin costs to $35 a month for Medicare beneficiaries and gives Medicare the power to negotiate with manufacturers to lower prices for certain high-cost prescriptions. 

AARP’s work doesn’t end with the passing of this law. We will continue to ensure it is fully implemented and benefits older Americans for decades to come.

Marguerite Ro is AARP Washington’s director.

The Senior Scene by — February 12, 2025 in Personal Finance/Consumers
Crypto ATMs must be regulated to protect consumers

COMMENTARY

By Christina Clem

Scam artists have a shiny, new tool to take your hard-earned money, and while the nature of the scam remains consistent – often preying on emotions or manufacturing a sense of urgency – the method of getting your money is evolving with technology.  Instead of purchasing gift cards or transferring money through wire services, the use of crypto ATMs is on the rise, and they are popping up at convenience stores, gas stations, and other high-traffic areas.

Recent data from the Federal Trade Commission (FTC) paints a troubling picture, indicating that scammers have successfully convinced individuals to deposit over $65 million into crypto ATMs in the first half of 2024 alone. Alarmingly, older adults have emerged as primary targets, with reports suggesting they are more than three times more likely than younger individuals to be targeted for such scams. 

Why are crypto ATMs the new kid on the block when it comes to fraud? For one, the kiosks quickly move cash into tough-to-trace cryptocurrency accounts owned by criminals. Also, they are largely unregulated. Unlike banks, which offer some protection, the decentralized nature of cryptocurrencies means that if you get scammed, it’s very hard to get your money back. This lack of consumer protection is a major concern. 

As we look toward the 2025 state legislative session, one of the top priorities for AARP is to advocate for the passage of legislation aimed at imposing essential safeguards around the operation of these ATMs to bolster consumer protection. While Washington does require licensing for crypto ATMs and some warnings about scams, our state doesn’t have an overseeing agency to regulate or enforce rules. 

The proposed legislation aims to introduce a number of consumer protections, like establishing a daily transaction limit to prevent large sums of money from being withdrawn or deposited in a single day and requiring mandatory scam warnings displayed on the machines to alert users to the risks involved. Transparency regarding fees associated with transactions would also be enhanced, allowing consumers to make informed decisions before proceeding with a transaction. 

Furthermore, the legislation advocates for the identification of a regulatory body that would be responsible for monitoring the operations of crypto ATMs. This agency would oversee the licensing process, conduct regular inspections to ensure compliance with state regulations, and enforce existing rules to deter fraudulent activities. By implementing these measures, we can make it harder for criminals to exploit the machines and help keep your hard-earned money safe. 

In addition to state oversight, you can help protect yourself by remaining vigilant. A request to pay money via a crypto ATM is a red flag that you may have stumbled into a scam. Legitimate businesses and government agencies don’t take payment through crypto ATMs. 

If you spot or have experienced a scam, report it to the FTC at reportfraud.ftc.gov and the FBI’s Internet Crime Complaint Center at IC3.gov. The more information they have, the better they can identify patterns, link cases, and ultimately catch the criminals.    

You can also contact the AARP Fraud Watch Network Helpline at 877-908-3360, a free resource, to speak with trained fraud specialists who provide support and guidance on what to do next and how to avoid scams.

Christina Clem is an associate state director of communications for AARP.

The Senior Scene by — January 29, 2025 in Personal Finance/Consumers