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Improved Social Security COLA Would Help Seniors Stay Ahead Of Inflation

FYI: Whenever I do a town hall about Social Security, one issue invariably rises to the top: cost-of-living adjustments (or COLAs).

Retirees across America consistently tell us that their annual COLAs simply are not adequate. And they have a reason to be concerned. Though the 2019 COLA is a decent 2.8%, these adjustments historically have not kept pace with seniors’ rising expenses. In fact, for three of the past 10 years there were no cost-of-living increases — zero. In 2017, the COLA was a scant 0.3% — or a meager $4 a month for the average beneficiary.

Simply put, retirees need a COLA that accurately reflects the effects of inflation on their cost of living. The current index, the CPI-W, is pegged to urban wage earners’ living expenses, and tends to underestimate what seniors spend on big ticket items like housing and medical care. By the same token, retirees purchase less gasoline than working-age Americans, even though the cost of gas figures prominently into the current inflation index. As the Center for Retirement Security explains, “In 2016, retirees received no COLA specifically because the cost of oil plummeted. The low cost of gasoline offset [actual inflation] in other areas.”
Regards,
Ted
https://www.marketwatch.com/story/improved-social-security-cola-would-help-seniors-stay-ahead-of-inflation-2019-02-28/print

Comments

  • Ted said:

    In 2017, the COLA was a scant 0.3% — or a meager $4 a month for the average beneficiary.

    So in 2017, the average monthy SS benefit is 1333 (working the number backwards $4 / 0.003)

    For 2019 the average is $1461 according to this article (not sure if before or after COLA)

    https://www.investopedia.com/ask/answers/102814/what-maximum-i-can-receive-my-social-security-retirement-benefit.asp

    That decent 2.8% increase will deliver $40 or $41 (depending on 2019 figure is before or after COLA adjustment).

    Social security is woefully inadequate and most people are not aware of it. They will be shocked one day when they go to collect their check.
  • Inadequate to what? I am sure you know what its express intent always was.

    But yes, lots of shock to come for some.
  • @davidmoran Inadequate to meet basic needs in retirement and for that reason it needs to be supplemented by personal funds.

    But, given most people are way behind in their savings for retirement (or their current income is not actually sufficient to save substantially), SS will be their main income for them in retirement.

    In reality many of them will not want to retire but will be forced to retire at some point either they will fall behind the recent technology a health event or an economical event such as another recession will force them out. Once out for a while, it is harder to come back.
  • https://www.ssa.gov/history/briefhistory3.html

    starting about halfway down we get to the modern era
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