Retirement is something that can happen when you are making other plans. A layoff or buyout often becomes an unplanned retirement if you can’t find a new job within a reasonable amount of time. The unemployment rate for adults age 65 and older grew to 5.7 percent in January, a 31-year high. But there are a few provisions in the American Recovery and Reinvestment Act, the giant $789 billion stimulus bill signed yesterday by President Obama, that could help retirees, especially if they have recently been laid off. Here’s a look at some of the provisions that could help retirees the most.
Social Security. Social Security beneficiaries, railroad retirees, veterans, and state government retirees will get a one-time extra payment of $250. The Social Security Administration will also get $500 million for a new computer facility and $500 million to reduce processing backlogs.
Enhanced unemployment benefits. The average weekly unemployment payment will be increased by $25 and expanded an additional seven weeks on top of the 13 weeks laid off workers currently receive. The first $2,400 of unemployment insurance benefits will also be exempt from federal income taxes in 2009.
Subsidized COBRA coverage. Employers are required to provide COBRA continuation health coverage for up to 18 months when you leave your job, but former employees must pay the full cost of the insurance plus a 2 percent administrative fee. Workers who lost or lose their job between September 1, 2008 and December 31, 2009 as a result of the economic downturn will now be eligible to receive a 65 percent subsidy towards their COBRA premium for up to 9 months. The version of the bill passed by the House contained a provision that would have allowed workers age 55 and older and those who have worked for their employer for 10 or more years to retain their COBRA coverage until they become eligible for Medicare or secure coverage through a new employer, but this section was stripped out of the final version of the bill.
Tell us, does the stimulus bill do enough to help retirees?