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Cost of Living Increase -- 2.8%
02-14-2008, 10:40 AM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,040
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Cost of Living Increase -- 2.8%
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02-14-2008, 10:53 AM
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#2
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Recycles dryer sheets
Join Date: May 2006
Posts: 442
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Time to sell the gas hog. Many cities have senior discounts for mass transit. My mom takes the bus for just 50 cents.
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02-14-2008, 11:11 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: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by RonBoyd
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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.........:)
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02-14-2008, 11:23 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,040
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Quote:
Originally Posted by dmpi
My mom takes the bus for just 50 cents.
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Does the bus, for instance, heat her house or provide her with groceries?
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02-14-2008, 12:35 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Location: Denver
Posts: 3,171
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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.
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02-14-2008, 01:39 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 1,183
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Quote:
Originally Posted by RonBoyd
Does the bus, for instance, heat her house or provide her with groceries?
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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.
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02-14-2008, 03:44 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 2,423
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Quote:
Originally Posted by FinanceDude
And inflation was 4.1.........
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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.
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02-14-2008, 05:08 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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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
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02-14-2008, 08:58 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,624
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Quote:
Originally Posted by FIRE'd@51
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.
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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.
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Payments to Social Security Recipients Should be Double Current Levels
02-14-2008, 10:09 PM
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#10
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Dryer sheet wannabe
Join Date: Oct 2007
Posts: 16
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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
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02-15-2008, 07:52 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: Dec 2007
Location: Denver, Colorado
Posts: 6,040
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Quote:
Originally Posted by Rocket_J_Squirrel
Not sure any of you have read John Williams
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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?
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02-15-2008, 12:06 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,040
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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
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02-15-2008, 01:03 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Dec 2005
Posts: 1,225
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Quote:
Originally Posted by RonBoyd
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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.
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02-15-2008, 06:50 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,624
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Quote:
Originally Posted by RonBoyd
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?
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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.
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02-15-2008, 07:01 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,624
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Quote:
Originally Posted by Rocket_J_Squirrel
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
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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?
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02-15-2008, 07:53 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Feb 2008
Posts: 1,281
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Quote:
Originally Posted by walkinwood
I might sound harsh, but SS is a safety net, not a pension plan!
..........
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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)
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02-15-2008, 09:05 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: Mar 2003
Posts: 18,085
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Quote:
Originally Posted by Independent
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?
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Seems about right. I'd add that he appears to have taken a big old hit off Ron Paul's bong.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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02-15-2008, 09:48 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Jul 2006
Posts: 1,901
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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
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02-15-2008, 10:28 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 1,183
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Quote:
Originally Posted by Independent
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?
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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.
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02-16-2008, 05:31 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: Feb 2007
Posts: 5,072
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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.
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