Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Cost of Living Increase -- 2.8%
Old 02-14-2008, 10:40 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Cost of Living Increase -- 2.8%

I wonder where, for instance, they buy fuel for their vehicles.

Proposed 2009 COLA Will Keep Five Million Seniors Below Poverty Says Senior League
__________________

__________________
RonBoyd is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-14-2008, 10:53 AM   #2
Recycles dryer sheets
 
Join Date: May 2006
Posts: 442
Time to sell the gas hog. Many cities have senior discounts for mass transit. My mom takes the bus for just 50 cents.
__________________

__________________
dmpi is offline   Reply With Quote
Old 02-14-2008, 11:11 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by RonBoyd View Post
I wonder where, for instance, they buy fuel for their vehicles.

Proposed 2009 COLA Will Keep Five Million Seniors Below Poverty Says Senior League
And inflation was 4.1.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 02-14-2008, 11:23 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Quote:
Originally Posted by dmpi View Post
My mom takes the bus for just 50 cents.
Does the bus, for instance, heat her house or provide her with groceries?
__________________
RonBoyd is offline   Reply With Quote
Old 02-14-2008, 12:35 PM   #5
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,676
I might sound harsh, but SS is a safety net, not a pension plan!

That's my stand till I turn 62 - then I'll start screaming about the unfairness of a 2.8% COLA.
__________________
walkinwood is online now   Reply With Quote
Old 02-14-2008, 01:39 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
Quote:
Originally Posted by RonBoyd View Post
Does the bus, for instance, heat her house or provide her with groceries?
Nope.

But in many cases they do qualify for Section 8 housing. My sister failed to plan and only worked for 10 or 12 years as an RN. She is on SS Disability and in a nice 1 bedroom apt in a senior complex. Her rent is less than $300 a month. Her SS check is 1K. She gets 90% of her food from Meals on Wheels. Medicare is her Insurance. She has a $22 phone bill and a $50 cable bill. Her car ins is $40 a month on a 5 year old Sebring with 30,000 miles on it.

Many here do not have $600 a month to decide how to spend. I know that currently I do not. My choice is to get by with less now so my tomorrows will be brighter. My sister's choice was to be a stay at home mom and then become addicted to surgery, pills & booze.
__________________
crazy connie is offline   Reply With Quote
Old 02-14-2008, 03:44 PM   #7
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by FinanceDude View Post
And inflation was 4.1.........
Actually, inflation was 4.1% measuring year-over-year CPI from Dec 2006 until Dec 2007. The SS COLA adjustment is figured by measuring the change in average CPI from the third quarter of 2006 until the third quarter of 2007 (remember, it is announced in October). That is why the the results are different, i.e. the highest inflation numbers occurred in the 4'th quarter of 2007.
__________________
FIRE'd@51 is offline   Reply With Quote
Old 02-14-2008, 05:08 PM   #8
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
I read this as an estimate of the 2009 SS increase. I don't know how they know what it will be a year before the numbers come in. Sounds like a Senior's organization pounding the drums a little early IMO.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 02-14-2008, 08:58 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,816
Quote:
Originally Posted by FIRE'd@51 View Post
Actually, inflation was 4.1% measuring year-over-year CPI from Dec 2006 until Dec 2007. The SS COLA adjustment is figured by measuring the change in average CPI from the third quarter of 2006 until the third quarter of 2007 (remember, it is announced in October). That is why the the results are different, i.e. the highest inflation numbers occurred in the 4'th quarter of 2007.
Yep, let's go back a year.

The Dec 05 to Dec 06 CPI-U increase was 2.5%
The 3rd qtr 05 to 3rd qtr 06 CPI-w increase used by SS was 3.3%

Since I took the time to look up the numbers, I'll add that over the last 10 years, the December CPI-U went up a total of 30.2%. The 3rd quarter CPI-W that SS used went up 29.0%.

The article talks about the "CPI-E". This report from the BLS talks has some background. It seems to have gone up faster than the CPI-U from 1998-2005, by about 0.2% per year.

www.bls.gov/cpi/cpiexpcpie2005.pdf

Doesn't look like a very big deal to me.
__________________
Independent is offline   Reply With Quote
Payments to Social Security Recipients Should be Double Current Levels
Old 02-14-2008, 10:09 PM   #10
Dryer sheet wannabe
Rocket_J_Squirrel's Avatar
 
Join Date: Oct 2007
Posts: 16
Payments to Social Security Recipients Should be Double Current Levels

Not sure any of you have read John Williams comments on SS and the CPI but the link below should be of interest to those on this discussion board.

Shadow Government Statistics » Blog Archive » 4. Consumer Price Index

If you really take time to understand what the government has been doing to the CPI the last 30 years you'll begin to realize why things seem so out of whack economically for most people.

RJS
__________________
Rocket_J_Squirrel is offline   Reply With Quote
Old 02-15-2008, 07:52 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Quote:
Originally Posted by Rocket_J_Squirrel View Post
Not sure any of you have read John Williams
No, I wasn't aware of the Shadow Government website. I can see that my work is cut out for me. Thank you for bringing it to my attention.

Another interesting article along this line is by Chuck Jaffe found in (at least) three places:

Yahoo! Personal Finance

and

Morningstar - Dow Jones & Company, Inc.: CHUCK JAFFE: Calculate Your Own Personal Inflation Index With This Formula

and

Calculate your own personal inflation index with this formula - MarketWatch

The key lines are:

"At my request, Afshar, who runs the economic research firm Kamran Afshar Associates in Bethlehem, Pa., broke down the CPI into its components, creating the chance for individuals to see how inflation hit home in their own household in 2007."

and

"The consumer price index applies certain weights to each major sector of spending, so that it currently assumes that the average consumer spends 42.7% of income on housing costs (including insurance, utilities, furnishings, rent or mortgage, etc.), 6.3% on medical care, 17.2% on transportation, 15% on food, 3.1% on education and so on."

Do you know if these numbers (the CPI weighting) are available to civilians?
__________________
RonBoyd is offline   Reply With Quote
Old 02-15-2008, 12:06 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
I suppose this answers my availability question:

"Due to budgetary constraints, the Economic Indicators service (Economic Indicators.gov) will be discontinued effective March 1, 2008."

Economic Indicators.gov
__________________
RonBoyd is offline   Reply With Quote
Old 02-15-2008, 01:03 PM   #13
Thinks s/he gets paid by the post
free4now's Avatar
 
Join Date: Dec 2005
Posts: 1,225
Quote:
Originally Posted by RonBoyd View Post
I suppose this answers my availability question:

"Due to budgetary constraints, the Economic Indicators service (Economic Indicators.gov) will be discontinued effective March 1, 2008."

Economic Indicators.gov
That's too funny. I've been trying to figure out how the government could unwind itself from this mess. Killing the messenger is probably the only politically expedient solution.
__________________
free4now is offline   Reply With Quote
Old 02-15-2008, 06:50 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,816
Quote:
Originally Posted by RonBoyd View Post

The key lines are:

"At my request, Afshar, who runs the economic research firm Kamran Afshar Associates in Bethlehem, Pa., broke down the CPI into its components, creating the chance for individuals to see how inflation hit home in their own household in 2007."

and

"The consumer price index applies certain weights to each major sector of spending, so that it currently assumes that the average consumer spends 42.7% of income on housing costs (including insurance, utilities, furnishings, rent or mortgage, etc.), 6.3% on medical care, 17.2% on transportation, 15% on food, 3.1% on education and so on."

Do you know if these numbers (the CPI weighting) are available to civilians?
The logical place to look is the bls website - Bureau of Labor Statistics Home Page
The very first item is "Consumer Price Index"
Click on that and you get Consumer Price Index Home Page
There is quite a bit of data there. About half way down the page you'll see "2005-2006 Weights", at ftp://ftp.bls.gov/pub/special.reques...05-06_2007.txt

In addition to the weights, you'll want the price changes at a lower level than "total". I have trouble finding them in detailed tables. It seems that I had a table once, but I can't find it today. The best I can do is the text based report at www.bls.gov/news.release/pdf/cpi.pdf

You'll notice that the first table has about 10 higher level lines, but the following text shows further detail for some of those lines.
__________________
Independent is offline   Reply With Quote
Old 02-15-2008, 07:01 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,816
Quote:
Originally Posted by Rocket_J_Squirrel View Post
Not sure any of you have read John Williams comments on SS and the CPI but the link below should be of interest to those on this discussion board.

Shadow Government Statistics » Blog Archive » 4. Consumer Price Index

If you really take time to understand what the government has been doing to the CPI the last 30 years you'll begin to realize why things seem so out of whack economically for most people.

RJS
If I'm reading this correctly, he says that the CPI understates real inflation by 7% per year. That means in 10 years, real prices will be about double what the CPI claims.

So if I bought a year's worth of stuff for $25,000 in 1997, the bls says I should be spending about $32,500 for approximately the same bunch of stuff in 2007, because the CPI-U went up about 30%.

But John Williams says that I'm really spending $65,000 today to buy that stuff.
(In adddition to reading the article you linked, I used the CPI calculator on the ShawdowStats website: Shadow Government Statistics » CPI Inflation Calculator , it seems to have the same message.)

Am I mis-interpreting him?
__________________
Independent is offline   Reply With Quote
Old 02-15-2008, 07:53 PM   #16
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
Quote:
Originally Posted by walkinwood View Post
I might sound harsh, but SS is a safety net, not a pension plan!
..........
Au Contraire

- if you are a career Federal Government employee who started after 1983 SS is 1/3 of your "pension plan".

Government pension annuities were greatly reduced from what they were under the old Civil Service Retirement System in favor of a "three legged stool" consisting of :
(1) a 401K type Thrift Savings Plan
(2) a significantly smaller small pension.
(3) a Social Security Check

Thanks again Ronald Reagan.

(and now Hillary wants to throw all of the "uninsurables" in America into the Federal Employees Health Benefit plan (FEHB) - thus destroying our risk pool & ensuring all Federal retirees will use vastly larger sums of our retirement dollars to pay for continuation of our health insurance in the future in order to subsidize all these uninsurables)
__________________
Texarkandy is offline   Reply With Quote
Old 02-15-2008, 09:05 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Independent View Post
If I'm reading this correctly, he says that the CPI understates real inflation by 7% per year. That means in 10 years, real prices will be about double what the CPI claims.

So if I bought a year's worth of stuff for $25,000 in 1997, the bls says I should be spending about $32,500 for approximately the same bunch of stuff in 2007, because the CPI-U went up about 30%.

But John Williams says that I'm really spending $65,000 today to buy that stuff.
(In adddition to reading the article you linked, I used the CPI calculator on the ShawdowStats website: Shadow Government Statistics » CPI Inflation Calculator , it seems to have the same message.)

Am I mis-interpreting him?
Seems about right. I'd add that he appears to have taken a big old hit off Ron Paul's bong.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 02-15-2008, 09:48 PM   #18
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
I've been retired 8 years and my expenses have increased by 24%. I live as well now as I did when I first retired. Don't drink the kool-aid.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 02-15-2008, 10:28 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
Quote:
Originally Posted by Independent View Post
If I'm reading this correctly, he says that the CPI understates real inflation by 7% per year. That means in 10 years, real prices will be about double what the CPI claims.

So if I bought a year's worth of stuff for $25,000 in 1997, the bls says I should be spending about $32,500 for approximately the same bunch of stuff in 2007, because the CPI-U went up about 30%.

But John Williams says that I'm really spending $65,000 today to buy that stuff.
(In adddition to reading the article you linked, I used the CPI calculator on the ShawdowStats website: Shadow Government Statistics » CPI Inflation Calculator , it seems to have the same message.)

Am I mis-interpreting him?
No. But look at the rest of the picture. "Stuff" does cost a good bit more. But, I bet you are not buying a new home and putting the old one out in the re-cycle bin. At a certain point in life the house is stuffed with "stuff". Not all of it needs to be replaced with any frequency. I doubt I will ever buy another baby crib or toy, my workshop tools will outlast me, my cars will go for 10 to 15 years without the commute. My groceries cost less for home cooking. So, it is relative in my view.

And yes, America is getting a come-uppence in the wage/hour/pay which is downgrading... At least in my opinion. But, I never bought into telling my kids that they were so special that the world owed them a silver spoon to eat off of.
__________________
crazy connie is offline   Reply With Quote
Old 02-16-2008, 05:31 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
SS will be chipped away at in a variety of ways over the next 20 years as the government struggles with funding it. I expect the COLA to be a target. I would also expect taxes to increase if one has other sources of income.

Energy: Transportation, Heating, Cooling, etc... is going to be more expensive than in the past. Since many retirees did not plan for that unexpected inflation (along with rising medical cost), they could have a difficult time.

We all need to keep in mind that inflation is alive and well. Combine that with the erosion of SS and some people will have a difficulty maintaining a reasonable standard of living.
__________________

__________________
chinaco is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Cost of living Surprises Moemg Life after FIRE 28 04-05-2007 03:03 AM
Cost of living in Thailand. Sam FIRE and Money 1 10-26-2006 01:05 AM
foreign cost of living perinova FIRE and Money 12 08-17-2006 06:16 PM
Cost of Living by Countries modhatter FIRE and Money 0 09-07-2005 02:26 PM
cost of living increase question ferco FIRE and Money 55 06-03-2005 04:57 PM

 

 
All times are GMT -6. The time now is 03:19 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.