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Crash said:Yes, it's just supposed to keep us even-steven. But I can choose NOT to spend that 6.2% and INVEST it! Yaba daba doo.
Yes, it's just supposed to keep us even-steven. But I can choose NOT to spend that 6.2% and INVEST it! Yaba daba doo.
When we compute an insured worker's benefit, we first adjust or "index" his or her earnings to reflect the change in general wage levels that occurred during the worker's years of employment. Such indexation ensures that a worker's future benefits reflect the general rise in the standard of living that occurred during his or her working lifetime.
Next ReleaseSeptember 2021 CPI data are scheduled to be released on October 13, 2021, at 8:30 A.M. Eastern Time.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 5.9 percent over the last 12 months to an index level of 269.086 (1982-84=100). For the month, the index rose 0.3 percent prior to seasonal adjustment.
davidrmoran said:@stillerstell you in october from the CPIW calcs looks like it, yes
@stillerstell you in october from the CPIW calcs looks like it, yes
Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 5.9 percent in 2022, the Social Security Administration announced today.
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tell you in october
from the CPIW calcs looks like it, yes
I am not clear what your second sentence means. Govs have headshaking inefficiencies, but many things are notably efficiently run (SS, MC, Darpa ...). Then again, I've had several public-sector jobs over the years.
I'm 32, and when I think about planning for retirement even my bull case does not include an assumption of SS. Why? Because it will not exist by the time it's "my turn."
There are multiple ways to fund the program way past the life expectancy of a 32 year old or even a 3 year old, but politics always seems to be the road block. Politicians will always make short term decisions that get them reelected versus making hard decisions to protect the country long term,
Some thoughts to make ss viable for jojo:
1-raise the tax on the employee or the employer or both
2-eliminate or substantially raise the earnings ceiling that can be taxed
3-reduce the size of payouts based on need, means testing, or eliminate payment to those who don't need the money altogether
4-increase the retirement age
For me, all these are viable. Enact all and the pain likely will not be felt by anyone. Pick 2 out of these 4 and a 32 year old will not have to worry about SS not being there for their retirement.
For the gory detail, see https://www.ssa.gov/OACT/solvency/provisions/index.html
One of the changes caught my eye because by itself it would reduce the long range actuarial balance shortfall by 86%. (For limitations in using the actuarial balance as a single magic number, see here, under A Range of Financial Measures.)
People are likely familiar with the fact that one's primary insurance amount (PIA), i.e. what one receives at full retirement age (FRA), is calculated based on one's 35 highest years of earnings. But earnings 35 years ago have to be adjusted; $1K in wages in 1986 was worth a whole lot more than $1K in wages today.
Have you ever thought about how that adjustment is made? I suspect that most people who have given it any thought believe that one's earnings are adjusted for inflation, just as SS payments have a COLA adjustment.
The proposed change, item B1.1 in the summary, is to calculate PIA precisely this way. This change would take care of most of the shortfall because in reality the current system is much more generous than merely adjusting past wages for inflation. Emphasis added.
While there are reasons I don't like this particular change, it would nevertheless be nearly invisible (as described) and come close to making SS solvent over the next 75 years (the planning horizon).
Go Pack !, Derf
try this one if blocked
Assuming no inflation for the months of August and September (and also no deflation), the 3Q average CPI-W for 2021 would be 267.789 (i.e. the July figure), and the 3Q 2020 average is 253.412.
That would make the COLA adjustment 5.67% since 267.789/253.412 = 1.0567.
To get a 4.6% COLA, prices in Aug and Sept would have to average 1.5% lower than July prices. For example, prices could drop 1% between July and Aug, and drop another 1% between Aug and Sept (i.e. 2% below July prices). This doesn't pass the laugh test.
It is true that the CPI-W M/M increases are moderating. Prices went up 0.91% from April to May, and 1.06% from May to June, but only 0.52% from June to July. If this deceleration continues, August prices could be the same as July's, and September's could be 0.5% lower. Still not enough of a drop for Moody's projection.
I'm not so interested in SS COLA, as there's nothing one can do about that. Besides, it's a nullity in terms of real dollars. But one has a choice about whether to buy some I-bonds. For this, it would be helpful to get a handle on the upcoming 6 month adjustment.
Even if Moody's is right and inflation, whether CPI-U or CPI-W, is running around "only" 4.6% through Sept, that would mean that I-bonds purchased now would average a 4.6% rate of return for a year. Can't find a better 100% secure place to park cash for a year or more.
Why people are getting the inflation debate wrong: Charles Schwab's Liz Ann Sonders
"Looking ahead, while coronavirus-related disruptions have clearly hindered worldwide economic growth, we believe that the global expansion will continue to accelerate as vaccination efforts ramp up and pent-up consumer demand leads to higher spending. While we expect inflation to increase somewhat as the expansion continues, we believe the recent uptick owes more to temporary supply disruptions than a lasting change in fundamentals. The change in Fed policy also means that moderate inflation is less likely to be followed by interest rate hikes that could threaten the economic expansion."
Note that the Social Security Benefits Increase in 2021 was announced on the SSA site on October 13, 2020.
2021 announcement per SSA site:
COLA 2022 Increase Announcement The Cost of- Living Adjustment (COLA) for 2022’s increase will affect the money disseminated monthly to Social Security beneficiaries. It will most possibly be declared on October 13. Such a schedule is in accordance with the 2020 declaration for the 2021 COLA increase.
We already know exactly when that will be: https://www.bls.gov/cpi/
Here's how to compute it:
All the necessary numbers aside from the Sept CPI-W figure are already here:
We should have a pool about whether it's going to be over 3%...
stillers said: I'll take the over. What did I win? Waiting...lol
from SS website:
The cost of transportation soared; no other category went up 4% or more. The category with the lowest Y/Y inflation was medical care, at 0.74%.
CPI-E data (Excel format)