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COLA anyone?
Old 06-18-2011, 12:49 PM   #1
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COLA anyone?

In a recent email from MOAA they speculated on next years COLA...

Quote:
Inflation climbed 0.5% in May, marking the ninth consecutive month the Consumer Price Index has risen. With four months left in the fiscal year, cumulative inflation stands at 3.4%. If that trend continues, retirees will be in line for a fairly substantial 2012 COLA.
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Old 06-18-2011, 01:21 PM   #2
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Quote:
Originally Posted by mickeyd
In a recent email from MOAA they speculated on next years COLA...
My retirement system fiscal year is July to June. Looking like a 3% plus cola for me, that is payable in January.
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Old 06-18-2011, 02:43 PM   #3
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Quote:
Originally Posted by Mulligan

My retirement system fiscal year is July to June. Looking like a 3% plus cola for me, that is payable in January.
From their fourth months left comment, it seems theirs runs oct-sept?

And since their cumulative is 3.4 and your is only 3, does that mean we had negative .4 inflation (or rather .4% deflation) from last July to oct?
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Old 06-18-2011, 03:42 PM   #4
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I'm sure the fed's will be happy since after a two year frozen SS increase will trigger an increased Medicare Part B deduction, which was frozen with SS adjustments the last two years.

Only those that filed for SS in the last two years had to pay the increase, but those on SS before that time did not have to pay the increased rate.

Depending on the possible SS COLA, along with the increase in Part B the increase may look like folks will be getting a small SS increase - if that.

Something else AARP can "make news" on ...
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Old 06-18-2011, 04:01 PM   #5
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Quote:
Originally Posted by arebelspy

From their fourth months left comment, it seems theirs runs oct-sept?

And since their cumulative is 3.4 and your is only 3, does that mean we had negative .4 inflation (or rather .4% deflation) from last July to oct?
I was doing a little "guesstimating" on mine. if memory serves me the CPI was pretty low July to Sept. CPI has really only started to heat up the past 6 months or so. Our system does not have to give the full amount. By law they have to give at least 2%, if CPI is at 2% or above. If it reaches 5% they have to give the full 5% but no more than 5%.
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Old 06-18-2011, 04:03 PM   #6
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Gotcha. Was just curious. Thanks.
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Old 06-18-2011, 04:10 PM   #7
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Here we have had drastically falling gas prices during the past month. If that is true all over the country, wouldn't that affect the CPI and lower the COLA?

I'm not expecting much of a FERS diet-COLA this year, and if I get one I would be pleased as punch. I have never seen one before. It might even cover part of the increase in my health insurance, which is subtracted out before I ever get my FERS deposit.
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Old 06-18-2011, 04:15 PM   #8
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Quote:
Originally Posted by W2R View Post
Here we have had drastically falling gas prices during the past month.
"Drastically?" Our gas prices here have fallen 12%, welcome, but far from drastic...
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Old 06-18-2011, 04:26 PM   #9
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Quote:
Originally Posted by arebelspy View Post
From their fourth months left comment, it seems theirs runs oct-sept?

And since their cumulative is 3.4 and your is only 3, does that mean we had negative .4 inflation (or rather .4% deflation) from last July to oct?
Yes. The federal government's fiscal year is 1 Oct to 30 Sep. Long ago, it was 1 Jul to 30 Jun, but they moved it by a quarter in 1976.

The figures mickeyd referenced are shown here:

MOAA: COLA Watch

As the chart shows, inflation crossed over to positive around the end of last calendar year.
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Old 06-18-2011, 04:28 PM   #10
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"Drastically?" Our gas prices here have fallen 12%, welcome, but far from drastic...
So if you are paying $4.00/gallon then that brings it down to $3.52. OK, ours has dropped less than that, so maybe not dreadfully drastic but depending on how they weight it, well, gosh....

I still think the RV'ers on the board ought to be in 7th heaven.
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Old 06-18-2011, 04:33 PM   #11
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depending on how they weight it ...
No, gasoline weighs a little over six pounds per gallon, no matter where you live.


Seriously, it dropped over 18% where I live, which I consider really significant.
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Old 06-18-2011, 04:44 PM   #12
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Quote:
Originally Posted by W2R
Here we have had drastically falling gas prices during the past month. If that is true all over the country, wouldn't that affect the CPI and lower the COLA?

I'm not expecting much of a FERS diet-COLA this year, and if I get one I would be pleased as punch. I have never seen one before. It might even cover part of the increase in my health insurance, which is subtracted out before I ever get my FERS deposit.
W2R- From what I've read (because I'm no expert), the CPI is projected to move upward modestly despite the recent reduction in gas prices. The producer price index had a lot of build up from previous months that are still being pushed through despite lower gas prices. Maybe it will be like it was a few years ago when inflation spiked the cola then inflation will recede after we get them. While I'm at it, I might as well hope for the perfect trifecta of 1) Nice cola 2) Receding gas prices 3) No healthcare premium increases on my healthcare premium!
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Old 06-18-2011, 04:49 PM   #13
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Quote:
Originally Posted by Mulligan View Post
While I'm at it, I might as well hope for the perfect trifecta of 1) Nice cola
Possibly!
Quote:
Originally Posted by Mulligan
2) Receding gas prices
Probably! For a while, anyway.
Quote:
Originally Posted by Mulligan
3) No healthcare premium increases on my healthcare premium!
What, are you out of your mind? No way! Not gonna happen in our lifetimes IMO.
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Old 06-18-2011, 04:52 PM   #14
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Quote:
Originally Posted by W2R View Post
I still think the RV'ers on the board ought to be in 7th heaven.
Due to the fact diesel has declined only 8% here, more like 2nd heaven...
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Old 06-18-2011, 04:54 PM   #15
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Due to the fact diesel has declined only 8% here, more like 2nd heaven...
Oh drat, I didn't know they use diesel. Oh well, I guess 2nd heaven isn't bad for the time being...
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Old 06-19-2011, 07:14 AM   #16
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The Feds calculate the COLA August to August for some strange reason. I haven't felt the impact of inflation so it will be nice to get a raise.
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Old 06-19-2011, 07:39 AM   #17
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We have already received the letter, 2.5% COLA effective July 1. But the copay for prescriptions has gone up drastically to it's probably a net decrease.

But at least we have prescription coverage so to us the glass is half full. One aunt just went on a new drug for leukemia. Cost is $10k per month! How can anyone of even close to normal income afford that?
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Old 06-19-2011, 02:45 PM   #18
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This Fairmark Forum entry describes the overall impact of a potential 3.5% SS cola coupled with a predicted Medicare premium increase.

Fairmark Forum :: Retirement Savings and Benefits :: SS COLA Projection and Part B Premium for 2012
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Another COLA analysis
Old 09-18-2011, 05:48 AM   #19
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Another COLA analysis

I thought this was interesting -

Amethyst

SSA Cola Watch – September Report (Updated Monthly) | Social Security Potluck
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Old 09-18-2011, 06:11 AM   #20
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Quote:
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The summary is that if current trends continue thru Sept the SSA COLA will be about 3.5%. I think I heard a news report last week that inflation had stalled this month so maybe a bit less. Still looking like 3%+.
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