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10-11-2010, 07:30 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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No SS Cola 2011
The official announcement is Friday.
No Social Security COLA expected for 2011 - Spokesman.com - Oct. 10, 2010
"Social Security was the primary source of income for 64 percent of retirees who got benefits in 2008, according to the Social Security Administration. A third relied on Social Security for at least 90 percent of their income."
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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10-11-2010, 08:08 AM
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#2
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Recycles dryer sheets
Join Date: Sep 2010
Posts: 95
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hmmm
I guess this SHOULD mean there is no inflation for the year
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10-11-2010, 08:19 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
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There may well be no net inflation for people who spend much of their income on cruise vacations and big screen TVs and other non-essential luxury items, as the prices on these things are falling. But tell that to the poor schmuck on a moderate income who spends most of his/her money on essential/required items like food, energy, utilities, health care, insurance and taxes.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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10-11-2010, 09:53 AM
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#4
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Recycles dryer sheets
Join Date: Sep 2010
Posts: 95
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Quote:
Originally Posted by ziggy29
There may well be no net inflation for people who spend much of their income on cruise vacations and big screen TVs and other non-essential luxury items, as the prices on these things are falling. But tell that to the poor schmuck on a moderate income who spends most of his/her money on essential/required items like food, energy, utilities, health care, insurance and taxes.
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I hear ya. This points out an interesting angle on how inflation can affect your retirement years. It really is a personal spending kind of thing and what you spend it on is what you worry about the rising costs on, not just the calculated inflation rate. Any ideas on how we find out exactly what areas are rising and which ones are not? It seems like food energy utilities health care insurance and taxes are on the rise but are they really and by how much? Is the inflation rate a good reflection of all of the above?
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10-11-2010, 10:08 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,186
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Quote:
Originally Posted by afntrn56
Any ideas on how we find out exactly what areas are rising and which ones are not?
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Just take a look at your own personal rate of inflation. Even if you haven't been keeping detailed year to year records of spending, it's easy to check the big hitters.
Our utility bills, property taxes and health insurance premiums are all up. It's a little harder for me to tell on food, entertainment and travel (on an apples to apples basis) because we've been bargain hunting more stringently and varying what we do in response to price increases.
In general, we cannot live on the same dolllars we did a couple of years ago and comsume the same things in the same quantities.
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"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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10-11-2010, 03:41 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Jan 2008
Posts: 1,671
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In terms of prices:
Down for us: energy, clothes (this is a qualitative opinion), property tax (assessment went down and the tax bill went down slightly), insurance
Up - health insurance, air fares, cable/phone/internet,
Flat - food (again, my guess) , lawn service, wine, haircut, restaurants, greens fees at local golf course, cat food.
hard to say what the average is ... my guess is roughly flat.
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10-11-2010, 04:04 PM
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#7
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Recycles dryer sheets
Join Date: May 2007
Posts: 148
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I think it is a mixed bag --- in 2008 the SS COLA was 5.8%--up primarily because of energy prices. Gas prices eventually fell, and in 2009 the SS COLA was 0%. I suppose you could argue that Social Security Recipients made out there---received a COLA when gas prices when up, but no corresponding decrease in benefits when gas prices went down. I realize that is just one product in the basket of good/services people buy. On the other hand, I just got notice of my 2011 health insurance premiums---since 2008, my share of payments are up about 30%, and some of the benefits (e.g. perscription coverage for example) has decreased--so in reality, more than a 30% increase in price. So some stuff is up, some is down. With regard to food, people do have some ability to mitigate price increases---switching to beans and rice if the price of red meat/chicken goes up, eating less frozen/prepared food and making things from scratch, etc. Obviously it is a lt harder to subsitiute something else for medical care/insurance.
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10-11-2010, 04:10 PM
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#8
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Full time employment: Posting here.
Join Date: Apr 2010
Posts: 853
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while my FIL put me on his naughty list for pointing this out last night, those who are still "contributing" and make over the max SS limit and enjoy a raise in the next year (even more so if no raise is delved out) will appreciate this. Of course, my question is, has the formula ever over-estimated the amount of inflation? the 2007 to 2008 increase was over 4.5%, was that accurate (I have no clue)?
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10-11-2010, 04:30 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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The spin on this is ... Oh those poor seniors - no increase. Yet they had the 5.8% windfall in 2009 that they must have forgotten about.
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10-11-2010, 04:57 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
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Quote:
Originally Posted by MasterBlaster
The spin on this is ... Oh those poor seniors - no increase. Yet they had the 5.8% windfall in 2009 that they must have forgotten about.
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Pfffft. I didn't get any windfall in 2009, because I wasn't on SS. Now I am, so I just lost a lot of money.
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Greg (retired in 2010 at age 68, state pension)
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10-11-2010, 04:59 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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Quote:
Originally Posted by MasterBlaster
The spin on this is ... Oh those poor seniors - no increase. Yet they had the 5.8% windfall in 2009 that they must have forgotten about.
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True, except for those born in 1947.
Bad news for people born in 1947 | Bankrate.com
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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10-11-2010, 04:59 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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Quote:
Originally Posted by GregLee
Pfffft. I didn't get any windfall in 2009, because I wasn't on SS. Now I am, so I just lost a lot of money.
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No you received a windfall. Whatever base level you receive is higher than it should be.
You just don't appreciate how fortunate you are.
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10-11-2010, 05:31 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
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Quote:
Originally Posted by MasterBlaster
No you received a windfall. Whatever base level you receive is higher than it should be.
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So, you're saying that my starting SS income in 2010 is 5.8% higher because of the 2009 COLA than it would have been without that increase? Knowing little about SS, I'm certainly willing to accept this, but I would like a reference.
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Greg (retired in 2010 at age 68, state pension)
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10-11-2010, 05:39 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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It would be the 5.8% 2008 (paid in 2009) increase less the real inflation increase from 2008 less the real inflation from 2009 (which would show up in 2010). 2009 and 2010 CPI inflation rates were very small though. I suspect that your base level is around 2-3% higher than it otherwise would be without the SS metric issues.
Note that the year-over-year CPI increase for 2008 was actually 3.8% yet SS went up 5.8% the next year. Note also that the CPI year-over-year increase for 2009 was actually negative 0.4% yet SS remained at the same payment.
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10-11-2010, 06:03 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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Quote:
Originally Posted by MasterBlaster
It would be the 5.8% 2008 (paid in 2009) increase less the real inflation increase from 2008 less the real inflation from 2009 (which would show up in 2010). 2009 and 2010 CPI inflation rates were very small though. I suspect that your base level is around 2-3% higher than it otherwise would be without the SS metric issues.
Note that the year-over-year CPI increase for 2008 was actually 3.8% yet SS went up 5.8% the next year. Note also that the CPI year-over-year increase for 2009 was actually negative 0.4% yet SS remained at the same payment.
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Until age 60 your earnings are adjusted by the "wage index factor". From 60 to 62 there is no adjustment. At age 62 and beyond you get a cola, or not, as in 2010 & 2011. I think because of this 1948 is partially affected.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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10-11-2010, 08:41 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 2,433
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Quote:
Originally Posted by MasterBlaster
You just don't appreciate how fortunate you are.
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Actually, most SS recipients are more fortunate than they think for another reason, as well.
CPI-W will probably be up about 1% from the same 3 months a year ago (July, August, September), but it's still below its 2008 level. Until it exceeds the 2008 level, there will be no SS increase (since SS didn't go down in 2010) . Now it's really not all that bad for most of the folks who are complaining, since their Medicare Part B premium won't increase either, since by law the Part B premium can't increase by more $ than the SS increase. For the average SS recipient the increase in Part B premium (at least $14 per month) would have pretty much eaten up any increase in SS, so in effect, they will have gotten an increase, de facto, by the freezing of the part B premium. The biggest "losers" are the folks who go on Medicare in 2011, since their Part B premium isn't frozen, and will likely face a part B premium larger than anyone currently on Medicare (except for those whose premiums are means-tested).
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I'd rather be governed by the first one hundred names in the telephone book than the Harvard faculty - William F. Buckley
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10-11-2010, 11:22 PM
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#17
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Full time employment: Posting here.
Join Date: Feb 2008
Posts: 748
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Everyone young and old have had to cut back this year.
But this only shows me that one shouldn't count on SS alone. SS was never meant to be the only source of income for one to live on.
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I don't want to spend my entire life at work. I deserve more. - Want2retire aka W2R
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10-12-2010, 05:58 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
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Quote:
Originally Posted by MasterBlaster
No you received a windfall. Whatever base level you receive is higher than it should be.
You just don't appreciate how fortunate you are.
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Although it may sound harsh to some I agree with MB
You could live your whole life without ever saving a dime and still end up being able to collect some steady income when you are unable to work late in life
Although the amount may be very small, it's still counts as pretty fortunate if you ask me
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"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
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10-12-2010, 08:17 AM
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#19
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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Quote:
Originally Posted by wildcat
Although it may sound harsh to some I agree with MB
You could live your whole life without ever saving a dime and still end up being able to collect some steady income when you are unable to work late in life
Although the amount may be very small, it's still counts as pretty fortunate if you ask me
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While I’m not particularly complaining about the non-cola in SS, I don’t really feel fortunate either. SS is set up to benefit those who either do not save enough to live in retirement, work in low wage jobs, or fall on hard times during their lives. Most on the RE forum, given enough warning, would have no trouble retiring without SS. This would be especially true had the $$$ contributed to SS been provided to them as additional income.
SS is an insurance program that requires everyone to contribute so that those who really need it will be covered. As part of the “baby boomer” generation I paid for my parents generation retirement. Now my daughter is paying for my generation. The problem is the size of the “boomers” and the ratio of workers to retiree’s.
Politicians wait until there is a gun to their head to make changes so instead of gradually making adjustments to SS they are now faced with the “third rail” choice of cutting current retiree’s or kicking the can down the road. Guess which one they will choose.
In any event most of my SS will be spent on my child and grandchild so at least they will get back some of what they pay in. I’m sure this is the case for many of you.
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
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10-12-2010, 08:23 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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DW and I are planning on ZERO payment from SS, it will be broke long before we can collect.........irregardless of whatever propoganda the govt issues telling us about all the money in the "Trust"............
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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).......:)
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