Soc. Sec. could get a 2.6% COLA in 2025

Paladin1950 said:
Everyone wants an increase every year. But do we really need it? We keep reading and hearing about the Social Security fund will soon be depleted. If they keep giving us raises every year, won't that make the SS fund become depleted sooner? Why not wait a few years? I for one can accept that. Then again, I'm a cheapskate that doesn't spend a lot of money.
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You may not need it but I sure to. I depend on my yearly raise (COLA) to cover at least partially my upcoming rent increase.
 
Paladin1950 said:
Everyone wants an increase every year. But do we really need it? We keep reading and hearing about the Social Security fund will soon be depleted. If they keep giving us raises every year, won't that make the SS fund become depleted sooner? Why not wait a few years? I for one can accept that. Then again, I'm a cheapskate that doesn't spend a lot of money.
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There are too many who depend on SS as their sole income. The last stat I saw was 40% but that from a couple of years ago. It has been proven that SS COLAs don't really keep up with inflation, so if there were no increases at all, it would be even harder for those who depend on this income to survive. The average SS benefit is $1,872. If someone was living in N.J. and couldn't get into senior housing, they'd be hard pressed to even find a one bedroom apartment for that amount, let alone have enough for groceries and medical care.

Some on this forum feel that there will be a last minute "hail Mary" (my terminology, not theirs) that saves the SS program from having to cut benefits. I sure hope they're right, but for now I'm warning my loved ones who are will be retiring around the time that cut is to take place, that it is a real possibility.
 

OneEyedDiva said:
Some on this forum feel that there will be a last minute "hail Mary"
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There are only so many ways to push that insolvency date down the road, and that last minute is now, imho. However, all the options are politically untenable, and that timeline will be shortened, when the FED starts reducing interest rates. It would also be reduced if taxes on Social Security were removed.

As for the COLA, the 2.6% seems to be holding steady at this point. There might be some excitement over the July CPI release, but August is looking slim and expectations for September is reversal, imho.

Frankly, I hope it is lower than 2.6%. I do not understand the people wanting inflation to be higher, to get a bigger increase. Backwards thinking! ;)
 
The CPI-W for July, is not released... so 1/3 of the data.
cpi and cola projections.jpg
August data should be a rinse and repeat, with September forecast at even to a bit down. Yesterday's PPI was ballyhooed, even though the previous 4 months were revised upward and the July numbers showed energy and food jumping. Have to wait and see, just as its wait and see how the shipping container prices spiking and potential port strike might impact later on.

Otherwise, life goes on!
 
Knight said:
The article is to long to post in it's entirety

The Senior Citizen League (TSCL), a nonprofit advocacy group, estimated last month that Social Security benefits would get a 2.7% cost-of-living adjustment (COLA) in 2025.

That forecast was recently revised lower because inflation cooled more than anticipated in May. Social Security benefits are now on pace to get a 2.6% COLA next year, according to TSCL statistician Alex Moore. That aligns with the estimate from the Social Security Board of Trustees.

MSN
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That's not even close with keeping up with inflation...plus they will probably charge us more for the Meicare Insurance
 
I learned something about COLA yesterday. For decades, SSA has been using the wrong calculation to arrive at the proper cost of living increase, cheating seniors out of a lot of money, and both the House and Senate know it. They've been talking for years about requiring SSA to use the correct method of calculation - CPI-E, which is for Americans 62 and older, instead of CPI-W, the metric currently used, which is for wage-earners - and it seems they're finally going to get around to it ...soon.

This guy explains it very clearly here (8-min video):

 
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Right now I'm a lot more worried about IRMAA (Medicare premiums) and the SS tax torpedo. I have 401(k) money that I worry about RMDs on as well. Then throw in the expiring tax cuts after 2025... the future could get expensive.

COLAs almost don't even matter compared to the big tax hit coming. Getting Roth conversions going is about the only thing I can do aside from making big qualified charitable contributions to at least have say over where the tax money goes.
 
Murrmurr said:
I learned something about COLA yesterday. For decades, SSA has been using the wrong calculation to arrive at the proper cost of living increase, cheating seniors out of a lot of money, and both the House and Senate know it. They've been talking for years about requiring SSA to use the correct method of calculation - CPI-E, which is for Americans 62 and older, instead of CPI-W, the metric currently used, which is for wage-earners - and it seems they're finally going to get around to it ...soon.

This guy explains it very clearly here (8-min video):

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I would be suspicious of congress doing anything and likely would get it wrong. I would be a proponent of CPI-E over CPI-W... IF the historical gap is closed with either a one time catch-up or over a period of a couple of years.

Just jumping to CPI-E gives a mixed outlook, as seen in the chart, which includes annual increases of the official, against CPI-E...
cpie.jpg
Yes, in 2022 and 2023, the raise would have been much smaller than current. There has been similar instances throughout the years. A person drawing $900 in 1998, would be drawing about $70 more this year if using CPI-E. However, during that same period, that peson would have pocketed $11,500 more.
 
Harry Le Hermit said:
I would be suspicious of congress doing anything and likely would get it wrong. I would be a proponent of CPI-E over CPI-W... IF the historical gap is closed with either a one time catch-up or over a period of a couple of years.

Just jumping to CPI-E gives a mixed outlook, as seen in the chart, which includes annual increases of the official, against CPI-E...
View attachment 370821
Yes, in 2022 and 2023, the raise would have been much smaller than current. There has been similar instances throughout the years. A person drawing $900 in 1998, would be drawing about $70 more this year if using CPI-E. However, during that same period, that peson would have pocketed $11,500 more.
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The point, or objective, would be to ensure that the COLA be realistically in step with the actual cost of living. I highly doubt that would include a one-time catch-up. More likely, a clean-slate and denial of any gap instead, and we wouldn't benefit, but future seniors would ...IF the SS program would even be sustainable after switching to CPI-E. Despite its age, there's also a possibility the COLA benefit would die and be replaced by some ingenious alternative program.

At any rate, I agree; I'm skeptical that congress will require SSA to adjust the metric, especially now, when inflation is at a peak. Maybe when (if) we experience an economic lull sometime in the future. [insert unicorns here]
 
the cpi is a price change index that tracks prices over the 1500 mini economies that make this country up .

it is not nor never can it be anyone’s personal cost of living indicator.

if contains loads of goods and services we may never use.

it includes conditions not available to others , like rent stabilization for half of all rentals for millions of people in nyc .

it can never reflect how many times you personally buy something .

it can’t account for the fact higher end goods may see bigger price increases but last longer .

it can’t reflect the fact that we may substitute items out of class if prices go to high .

there are weeks i wont buy grapes if they are to high so i will get something different.

it does not reflect the fact that as we age we tend to spend in a smile shape with discretionary money .

we spend more during the earlier go go years of retirement , then we enter the slow go years and we slow down spending on a lot of things we used to buy and do . then we enter the no go years and medical costs tend to ramp up .

so for many what we no longer buy and do tends to offset a lot of the increases in things we still spend on .

ty bernecke as well as sun life did huge studies on retiree spending over long periods of time and found most don’t even need as much inflation adjusting as they planned for as that smile shape absorbs a lot of higher costs

of course if you have an underfunded retirement with poor growth on your money you will struggle no matter what

so complaining about the price change index reflecting your personal consumption is crazy
 
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dilettante said:
Right now I'm a lot more worried about IRMAA (Medicare premiums) and the SS tax torpedo. I have 401(k) money that I worry about RMDs on as well. Then throw in the expiring tax cuts after 2025... the future could get expensive.

COLAs almost don't even matter compared to the big tax hit coming. Getting Roth conversions going is about the only thing I can do aside from making big qualified charitable contributions to at least have say over where the tax money goes.
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I'm so glad I made a Roth conversion when I did. That was back in the day when "experts" said if you didn't make a certain amount (which I didn't) converting wouldn't be worth it. To me that was backward thinking. Why would I want to pay taxes on investments when my retirement income would be lower? My Roth, which has grown nicely, now makes up 67% of my investments and my traditional IRA only 6%. My RMDs from that are qualified charitable deductions, so it winds up that I don't pay taxes on 73% of my investments.
 
Just received an official email from the SSA with a link to log on to view the new numbers. However the last time I logged onto my SSA account with their supposed new security features last year, it was ridiculously annoying difficult, endlessly going around in circles blindly through web pages without adequate directions, having to repeatedly login. Eventually succeeded using an IDme account.
 
David777 said:
Just received an official email from the SSA with a link to log on to view the new numbers. However the last time I logged onto my SSA account with their supposed new security features last year, it was ridiculously annoying difficult, endlessly going around in circles blindly through web pages without adequate directions, having to repeatedly login. Eventually succeeded using an IDme account.
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That's interesting. I usually get notifications by email from SSA too, but haven't gotten that one yet. Considering the $10+ rise in the Medicare premium, I calculated a $27/mo net increase.
 
David777 said:
Just received an official email from the SSA with a link to log on to view the new numbers. However the last time I logged onto my SSA account with their supposed new security features last year, it was ridiculously annoying difficult, endlessly going around in circles blindly through web pages without adequate directions, having to repeatedly login. Eventually succeeded using an IDme account.
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Sorry, but can we even expect anything administered by 'the government' to happen in time, reasonably or logically? Hey, I'm not saying the thing has to be replaced but more as something to laugh at (if one can roust up the patience) and then stoically plod along through it.
 
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