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The Social Security Administration’s recently announcement a Cost of Living Adjustment (COLA) in the form of a 3.6 percent increase in retirees’ 2012 monthly Social Security checks. This change, which hasn’t occurred since 2009, means the current average monthly Social Security check will rise from $1,082 to $1121. Not a huge amount but it sure doesn’t hurt in today’s economy. This great news came with the caveat that Medicare, which itself has not raised its premiums for the past couple of years, may end up raising them which would in turn be deducted from Social Security checks and the end result being that much of the COLA increase would disappear on your Social Security check.

The good news is that there will be a nominal increase with Medicare Part B which is physician and outpatient services, but it will be much less than earlier thought. Premiums in 2012 will be raised to $99.90 per month which is a $3.50 increase instead of the $10.20 raise originally projected by Medicare. The monthly premium for Medicare Part A which is hospital coverage will stay the same at $451.00. Of course this only applies to those who pay a premium. In addition, those who took the big leap into retirement in 2011 and are currently paying a $115.40/month for Medicare will actually see their premiums drop to the standardized $99.90 mentioned above. Finally, Medicare Part B’s deductible is dropping as well to $140 and Medicare Part A will rise only $24.00 to $1,156.00. This is pretty darn good news.

However, this all being said, this is small peanuts and really won’t impact your life as much as taking the time to explore alternative investments in a self directed IRA. I find most people hesitate and don’t really know what to do with their money so they stick the bulk of their retirement in stocks and bonds. How is that working for you? Most people think that diversification is put some money in one mutual fund and some in another and so on. This is not diversification, this is suicide. Why? Typically, the when the market moves up all the stocks move up and when the market goes down the entire market heads in the same direction. Even the “international” funds are not a great haven and are tricky.

I find it best to invest in what I know and what I understand. I don’t have to be a “guru” in the area but at least understand the underlying asset and the potential risk and reward. The best thing I ever did was to roll my 401k to a self directed IRA where I am now in control and have opportunity to take advantage of great moves in Gold, Oil, Real Estate, private equity deals and much more. I think you may be surprised at how easy it really is to get double digit returns.

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