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Social Security buying power down 1/3 in 20 years
06-22-2018, 02:49 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Sep 2012
Posts: 1,568
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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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06-22-2018, 03:46 PM
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#2
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Recycles dryer sheets
Join Date: Apr 2012
Posts: 216
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...based on a survey of 1000 seniors.
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06-22-2018, 04:27 PM
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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: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
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Duh.
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06-22-2018, 08:58 PM
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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: May 2004
Location: SW Ohio
Posts: 14,404
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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.
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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.
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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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06-22-2018, 10:29 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 16,972
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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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Fortune favors the prepared mind. ... Louis Pasteur
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06-23-2018, 04:43 AM
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#7
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Administrator
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,514
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06-23-2018, 06:57 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,306
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Quote:
Originally Posted by samclem
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.
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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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06-23-2018, 06:59 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,306
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Quote:
Originally Posted by samclem
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.
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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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06-23-2018, 07:19 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,670
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Quote:
Originally Posted by samclem
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%.
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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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06-23-2018, 08:55 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2017
Location: City
Posts: 10,308
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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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06-23-2018, 09:00 AM
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#12
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Full time employment: Posting here.
Join Date: Apr 2016
Location: warren
Posts: 935
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Quote:
Originally Posted by target2019
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Home heating is way down here in Mi. Natural gas.
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06-23-2018, 09:10 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,464
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Quote:
Originally Posted by Sunset
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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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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06-23-2018, 09:27 AM
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#14
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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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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06-23-2018, 12:53 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Jan 2017
Location: Hog Mountian
Posts: 2,077
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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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06-23-2018, 01:23 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by athena53
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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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.
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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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06-23-2018, 06:21 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2014
Posts: 7,306
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Quote:
Originally Posted by Independent
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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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06-23-2018, 06:36 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Posts: 2,962
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Quote:
Originally Posted by Red Badger
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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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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06-23-2018, 06:50 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by athena53
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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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.
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https://www.brookings.edu/blog/up-fr...e-chained-cpi/
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06-23-2018, 08:20 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,464
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Quote:
Originally Posted by athena53
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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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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FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
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