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Social Security buying power down 1/3 in 20 years
Old 06-22-2018, 02:49 PM   #1
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Social Security buying power down 1/3 in 20 years

https://www.upi.com/Study-Social-Sec...6091529597919/

Expenses rising faster than cost of living adjustment.
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Old 06-22-2018, 03:46 PM   #2
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...based on a survey of 1000 seniors.
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Old 06-22-2018, 04:27 PM   #3
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Duh.
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Old 06-22-2018, 08:13 PM   #4
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This is the complete study referred to in the article.
https://seniorsleague.org/assets/201...wer-Report.pdf
Haven't thought of home heating oil for 25 years or so. Depending on where a person lives, they may have access to energy assistance:
https://www.benefits.gov/benefits/br...ry/category/27
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Old 06-22-2018, 08:58 PM   #5
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I wonder what the study will say once they get done editing and proofreading it?


Some snippets:


Quote:
The erosion in the buying power of Social Security benefits in 2018 has hit the
worst since 2012. When the loss of buying power in 2018 was 34 percent was the
deepest loss in buying power recorded by this study to date.


What does that even mean?


Quote:
Over the eight years that The Senior Citizens League has conducted this study there is only one other year when the loss of buying power was also this large — in 2012. The 34 percent loss in buying power recorded in 2012 was is the largest loss recorded by this study to date.
34% loss in buying power in one year? Or since some other benchmark? I don't think anybody checked this document to assure it made sense before it was put online and picked up by UPI.



The Senior Citizen's League is an advocacy group--nothing wrong with that. Among the recommendations at the end of their "study" was: "Guarantee a minimum COLA of no less than 3 percent." That is, even if the general inflation rate is zero, or even if a basket of goods/services especially focused on seniors goes up by zero, Social Security checks should still be increased by at last 3%.
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Old 06-22-2018, 10:29 PM   #6
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I'm pretty sure whatever benchmark is used to add inflation to SS, probably undervalues it so that the buying power is eroded for anything that rises in price equal to inflation or higher.

Its a way to make SS less costly.
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Old 06-23-2018, 04:43 AM   #7
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Quote:
Originally Posted by samclem View Post
I wonder what the study will say once they get done editing and proofreading it?
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Old 06-23-2018, 06:57 AM   #8
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Originally Posted by samclem View Post
34% loss in buying power in one year? Or since some other benchmark? I don't think anybody checked this document to assure it made sense before it was put online and picked up by UPI.
Thanks for the excerpts from the original. Sadly, it almost reinforces the stereotype of befuddled older people. I couldn't figure it out, either.

SS COLA is based on the CPI-W index. I'd been told at one time that it was typically lower and less volatile than other indices but it does seem to include most of the major items. According to the Motley Fool, it includes Food and Beverage, Housing, Apparel, Transportation, Medical Care, Recreation, Education and Communication and "Other Goods and Services".
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Old 06-23-2018, 06:59 AM   #9
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Originally Posted by samclem View Post
34% loss in buying power in one year? Or since some other benchmark? I don't think anybody checked this document to assure it made sense before it was put online and picked up by UPI.
Thanks for the excerpts from the original. Sadly, it almost reinforces the stereotype of befuddled older people. I couldn't figure it out, either.

SS COLA is based on the CPI-W index. I'd been told at one time that it was typically lower and less volatile than other indices but it does seem to include most of the major items. According to the Motley Fool, it includes Food and Beverage, Housing, Apparel, Transportation, Medical Care, Recreation, Education and Communication and "Other Goods and Services".

Still- I look at inflation in some of those items (Medical Care, especially health insurance premiums, Communication, which would include cable and cell phone bills, recent increases in the price of gas) and they seem to be well above the COLA level.
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Old 06-23-2018, 07:19 AM   #10
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Quote:
Originally Posted by samclem View Post
I wonder what the study will say once they get done editing and proofreading it?


Some snippets:


[/SIZE]


What does that even mean?





34% loss in buying power in one year? Or since some other benchmark? I don't think anybody checked this document to assure it made sense before it was put online and picked up by UPI.



The Senior Citizen's League is an advocacy group--nothing wrong with that. Among the recommendations at the end of their "study" was: "Guarantee a minimum COLA of no less than 3 percent." That is, even f the general inflation rate is zero, or even if a basket of goods./services especially focused on seniors goes up by zero, Social Security checks should still be increased by at last 3%.
https://www.trea.org/
"The mission of TREA: The Enlisted Association is to enhance the quality of life for uniformed services enlisted personnel, their families and survivors - including active components, Reserves, and National Guard, and all retirees; to stop the erosion of earned benefits through our legislative efforts, to maintain our esprit de corps, dedication and patriotism, and to continue our devotion and allegiance to God and Country."

They would probably appreciate support from volunteer proofreader(s).
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Old 06-23-2018, 08:55 AM   #11
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Based on 1000 subjective opinions, data gathered by an organization with an agenda. That's all I need to know. It it looks like garbage, smells like garbage, ...
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Old 06-23-2018, 09:00 AM   #12
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Quote:
Originally Posted by target2019 View Post
This is the complete study referred to in the article.
https://seniorsleague.org/assets/201...wer-Report.pdf
Haven't thought of home heating oil for 25 years or so. Depending on where a person lives, they may have access to energy assistance:
https://www.benefits.gov/benefits/br...ry/category/27
Home heating is way down here in Mi. Natural gas.
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Old 06-23-2018, 09:10 AM   #13
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Originally Posted by Sunset View Post
I'm pretty sure whatever benchmark is used to add inflation to SS, probably undervalues it so that the buying power is eroded for anything that rises in price equal to inflation or higher.

Its a way to make SS less costly.
Actually, except for the age-specific problem of health care both CPI-U and CPI-W (-W is used for SS) are generally agreed to overstate inflation. BLS says the CPI measures are biased upward by ignoring substitution and by a small sample size. That's why they developed chained CPI (C-CPI-U). Good discussion here: https://www.cbo.gov/publication/44088

BLS has also developed CPI-E (technically for "experimental" but commonly for "elderly") to capture inflation for individuals 62 and older. Historically it has run about 0.2% higher than CPI-W.

Instead of discussing CPI-E versus CPI-W, the Senior Citizen's League study fabricated its own index to generate a click-bait headline, IMO.
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Old 06-23-2018, 09:27 AM   #14
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Apparently debunks that the COLA is truly represents the cost of living changes. If it's right.
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Old 06-23-2018, 12:53 PM   #15
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UPI... Edit? Proofread? Fact check?

Not for over 30 years. It's all copy/paste or share, or retweet. Journalism is in the same category as appliance salesmen of the 60's (same ilk as most car sales folks). Untrustworthy, lazy, and generally cavalier with the truth. I guess they are all welcome to their own facts. I'll stick with mine, thank you.
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Old 06-23-2018, 01:23 PM   #16
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Originally Posted by athena53 View Post
Thanks for the excerpts from the original. Sadly, it almost reinforces the stereotype of befuddled older people. I couldn't figure it out, either.

SS COLA is based on the CPI-W index. I'd been told at one time that it was typically lower and less volatile than other indices but it does seem to include most of the major items. According to the Motley Fool, it includes Food and Beverage, Housing, Apparel, Transportation, Medical Care, Recreation, Education and Communication and "Other Goods and Services".

Still- I look at inflation in some of those items (Medical Care, especially health insurance premiums, Communication, which would include cable and cell phone bills, recent increases in the price of gas) and they seem to be well above the COLA level.
The CPI-W uses the same database as the CPI-U, it just uses different weights.

Quote:
Because maintaining two independent samples was not sustainable, BLS economists track spending and prices by using the CPI-U sample of geographic areas, outlets, items, and prices. The CPI-W is then derived by adjusting the weights for various spending categories, reflecting that the spending habits of the wage earner population differ somewhat from the all urban consumer population.
https://www.bls.gov/opub/btn/volume-...-and-cpi-u.htm

Since you are an actuary, you may want to look at the numbers here
https://www.bls.gov/cpi/tables/relat...tance/2017.pdf
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Old 06-23-2018, 06:21 PM   #17
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Since you are an actuary, you may want to look at the numbers here
https://www.bls.gov/cpi/tables/relat...tance/2017.pdf
Wow- 13 separate categories just for meats, poultry and fish, each with its own assigned weight!

Interesting discussion in the other link about substitution- that CPI-W is somewhat lower because it reflects substitution- that if the price of one good increases by a large % consumers will moderate the increase in their COL by buying a substitute that hasn't increased as much- the example was buying more hamburger when the price of steak increases substantially. That goes only so far, till you cut the fat out of the budget and start skipping things you need.
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Old 06-23-2018, 06:36 PM   #18
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Originally Posted by Red Badger View Post
UPI... Edit? Proofread? Fact check?

Not for over 30 years. It's all copy/paste or share, or retweet. Journalism is in the same category as appliance salesmen of the 60's (same ilk as most car sales folks). Untrustworthy, lazy, and generally cavalier with the truth. I guess they are all welcome to their own facts. I'll stick with mine, thank you.
The Rev. Sung Myung Moon of the Unification Church bought UPI in 2000. He also has a piece of the Washington Times
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Old 06-23-2018, 06:50 PM   #19
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Originally Posted by athena53 View Post
Wow- 13 separate categories just for meats, poultry and fish, each with its own assigned weight!

Interesting discussion in the other link about substitution- that CPI-W is somewhat lower because it reflects substitution- that if the price of one good increases by a large % consumers will moderate the increase in their COL by buying a substitute that hasn't increased as much- the example was buying more hamburger when the price of steak increases substantially. That goes only so far, till you cut the fat out of the budget and start skipping things you need.
I didn't see the bold in the link.

The BLS does calculate a "chained cpi" called the C-CPI-U which includes substitution.

The chained CPI is now embedded in tax law:

Quote:
By law, tax brackets are adjusted each year to account for changes in the cost of living. ... The tax bill passed in 2017 by Congress changed the law to use the chained CPI (C-CPI-U). Because the chained CPI climbs more slowly than the primary CPI, the tax bracket thresholds will increase by smaller amounts each year.
https://www.brookings.edu/blog/up-fr...e-chained-cpi/
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Old 06-23-2018, 08:20 PM   #20
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Originally Posted by athena53 View Post
Wow- 13 separate categories just for meats, poultry and fish, each with its own assigned weight!

Interesting discussion in the other link about substitution- that CPI-W is somewhat lower because it reflects substitution- that if the price of one good increases by a large % consumers will moderate the increase in their COL by buying a substitute that hasn't increased as much- the example was buying more hamburger when the price of steak increases substantially. That goes only so far, till you cut the fat out of the budget and start skipping things you need.
Yes, we all pay taxes so that the BLS can provide a sophisticated analysis of CPI, which the subject article seems to ignore for propaganda purposes.

And CPI-W does not include substitution. It just reflects the difference between "working" people and "average" people (so CPI-U arguably splits the difference between working and non-working but that is an over-simplification). C-CPI-U includes substitution and is (again arguably) closer to what an (urban) retiree faces, neglecting the health care inflation problem.

Bottom line is that retirees may be facing higher inflation than CPI-W used to calculate the COL for SS, but the subject article "inflates" the problem for click-bait purposes.

A whole 'nother area of debate is why does
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