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The government announced last week that Social Security recipients won't get a cost of living allowance, or COLA, increase this year. This is the second year in a row that they haven't gotten a bump. If you are nearing retirement, this is worthy of concern.
Social Security COLAs are calculated every October by comparing the third-quarter data of the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, with the previous year's costs. An increase in the CPI produces a COLA paid the following January for retirees and other Social Security beneficiaries.
If you get a chance to lobby your Congressman on this matter, you might suggest to him that he push for a change in the way the cost of living index is computed for people of retirement age.
Dean Baker, who is an economist and co-director of the nonprofit, nonpartisan think tank Center for Economic and Policy Research, concurs with what many older people have been saying for years -- the CPI doesn't accurately reflect the increases in the price of things that they are buying. "They are spending more on health and less on computers," he says.
With a little tweaking, Baker says the Bureau of Labor Statistics already compiles the information that it would take to create a second CPI, a so-called CPI-E, that takes into account the needs of older people, but the information isn't being used. Baker speculates that's because officials are fearful it will drive the cost of Social Security higher.
"Congress has been looking for ways to cut Social Security, and if the consumer price index reflects higher costs for seniors rather than lower ones, it's harder to argue for cuts in benefits," he says.
Even if you think Social Security is due for an overhaul, using accurate information to calculate benefits is smarter than the way we're doing it today. Retirement planning is tough enough without relying on bad data.
I am on SSA, an auto accident put me there. Savings?, well that went out the door with medical expense over a 2.5yr period. Only a few get free (Socialized) medical care, which we the tax payers pay for.
The "Formula" listed by Ponzi is a can do formula, if you do not mind moving to "Austin", it does not work in certian larger cities. You should look at your deductions on your pay stub, I think you will find SS to be the lowest, Medicade for those who care not to work because everything has been provided for them eats up a chunk of your pay, and of course we have to keep our politicians salaries high (er).
We can blame Obama, but this has been going on a lot longer than he has been in office. It is time for the people to gather realistically and make changes in this country, we forget the so called Democracy is for and of the people........
We can as a people can change this America
@Ponzi Sheme, what you say holds some water, but the how about the indignity of those who have worked and get less than those who have not worked and seem to get so very much more; "you know "; free housing, excessive food stamps, free medical. Lets cut some of these "Free" programs. I have heard and seen the excuses of many who do not pay medical (they have medicade paid for by whom?), $900.00 in free food can feed how many families! I side with the worker who has worked for this period, not those who do not pay (ever) for births, housing, food; you know things we use to have.................
Cut Welfare, cut Out of Country Aide, SSA is an investment from our checks, the rest is merely thrown upon the worker........
if the gov would just pay a settlement lets say 50 to 100 thousand dollars to each person on social security then just stop.i get ss and i would take that to invest in somthing. it would even help the economy.i worked years laying brick,i paid on average 150 dollars per week in taxes when a lot of people only made that per week.How can the gov take its promblems out on a program that was well funded until the gov decided to borrow all the money now cant pay it back!maybe if obama would take less vacations!or stop giving other countrys billions in aid.DONT EVERYONE THINK WE SHOULD TAKE CARE OF AMERICANS FIRST!
Ok, $1100 a month.
Shelter - $410 All utilities included apartment in Austin, didn't even go the Section 8 route.
Phone - $23 no frills landline.
MetroBus Pass - $28 for 31 days.
Medical - at $1100 a month, you are Medicaid eligible unless you have assets to use.
Taxes - you have none, SS isn't taxed, you have no property tax, what exactly are you paying?
That leaves over $600 for food and clothes. Goodwill and Salvation Army have shirts for $2-5, and pants $5-10. Use a charitable food program, and you get most of the month covered for close to $150.
Like I said, no eating out, no cell phone, no cable, no car. It is unfortunate when folks are older, but broke people have to live within their means too. It's doable, it's not pleasant.
Yup, but don't count on SS to pay for the "bare necessities" unless you want to eat dog food, live in a tenement, make do with the clothing you already have, and stop going to the doctor. I made an average salary for 35 years and my SS check is $1100 a month, not including payments for taxes and Medicare. I challenge you to pay for the "bare necessities" out of that!
Thank God,I saved over the years!
So the accepted formula for the last how many years generates a number, and since you don't get more of my paycheck you're upset?
It's the plan of last resort, bare necessities, food, shelter, clothing, medical. Last I checked, it covered all of those, unless you run up debt, your fault, and live beyond your means, your fault.
Sorry, no sympathy here.
This is a long standing complaint. Now, it is even worse with low interest rates and the possibility of deflation.