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Old 08-14-2021, 08:31 AM   #61
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Just a guess here.
Since the potential issue with those born in 1960 affects those who will be 61 this year, then logically when it is states that those who are 62 get a COLA increase, so effectively those who are 61 get the AWI adjustment based on year 60 data which doesn't take effect until age 61.
So the data can be confusing, as sometimes it can be the actual age referenced vs. sometimes it can be the calculated age that the data references.
So if AWI drops for those now 61, say 5%, and the COLA goes up 5%;
Then those 61 get the AWI decrease but not the COLA, so their SS will be 10% lower than those who are 62?
Yeah, thatís gonna be a problem, donít forget those who are 61 now are the first year that FRA is 67.
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Old 08-14-2021, 08:34 AM   #62
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.... donít forget those who are 61 now are the first year that FRA is 67.
A whole two months more than those born in 1959.
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Old 08-14-2021, 08:58 AM   #63
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Hmm. Current fed budget is trillions in the red, no ability to pay current bills without monetary destruction. Paying bills by printing and borrowing leads to price inflation. And CPI inflation adjustment leads to higher entitlement spending.

Looks like a feedback loop. Wonder how far it will go?
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Old 08-14-2021, 06:40 PM   #64
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I am forever the skeptic; I'll believe it when I see it. That said, I have to admit I have had some fun calculating what increases I might get.
With 6% for July, the chance of a large COLA are pretty good unless things reverse quite a bit in August and September which I don't really see happening. It might not end up at 6.2% (as currently estimated) but I would be surprised if it was under 5% and shocked if it was under 4%. I do think we should sort of look at this year as 2 years. That is combine 2020 and 2021 since last year was so messed up due to Covid. Much of the increase now is due to high demand and lower supply as a result.

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.

I believe a bill has been proposed in Congress to change the CPI factor for cola calculations from CPI-W, inflation for Urban Wage Earners to CPI-E, inflation for the Elderly, which is higher than W, by a couple of hundredths of a percent. I'm not sure if that proposal has any chance of success this year. Methinks not.
At one time, I thought it was really important to make that change. Now that I realize how little a difference it would make, I am more sanguine about the whole thing.


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I agree- but given the skyrocketing health costs in the US, it's pretty easy for premium increases to exceed the COLA adjustment.
Well it depends on how much you get in SS. The Medicare Part B premium would have to well more than double for it to exceed my COLA adjustment. Even with a 20% increase in Part B I would still get a healthy COLA.
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Old 08-14-2021, 06:51 PM   #65
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With 6% for July, the chance of a large COLA are pretty good unless things reverse quite a bit in August and September which I don't really see happening. It might not end up at 6.2% (as currently estimated) but I would be surprised if it was under 5% and shocked if it was under 4%. I do think we should sort of look at this year as 2 years. That is combine 2020 and 2021 since last year was so messed up due to Covid. Much of the increase now is due to high demand and lower supply as a result.
Sounds logical to me! This is getting exciting. I can't even imagine! I think it's just human to feel a little happy greed when confronted with unexpected cash.
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Old 08-15-2021, 04:10 AM   #66
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I am about to retire from the federal government on Dec 31, 2021 and am to young for SS but will receive the supplement, which is based on my future SS benefit. The supplement does not receive a COLA. If I were to retire Jan 1, 2022, would the 2022 COLA be factored into my FERS supplement amount? Anyone know?
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Old 08-15-2021, 04:50 AM   #67
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Have you asked your HR retirement adviser? Ours always seemed very up on this kind of question. And if the agency rep didn't know, she usually had some outside expert she could ask. These were retired employees, who took Office of Personnel Management training and became paid retirement benefits consultants.

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I am about to retire from the federal government on Dec 31, 2021 and am to young for SS but will receive the supplement, which is based on my future SS benefit. The supplement does not receive a COLA. If I were to retire Jan 1, 2022, would the 2022 COLA be factored into my FERS supplement amount? Anyone know?
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Old 08-15-2021, 05:26 AM   #68
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Have you asked your HR retirement adviser? Ours always seemed very up on this kind of question. And if the agency rep didn't know, she usually had some outside expert she could ask. These were retired employees, who took Office of Personnel Management training and became paid retirement benefits consultants.
LOL....I was told by our clueless HR rep that I needed to contact OPM for any questions about the supplement.
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Old 08-15-2021, 06:41 AM   #69
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If you can't get a solid answer, why not push back your retirement by a 3 days. Unless things have changed, retiring (from a federal job) during the first 3 days of the month, means that you are entitled to a full pension check for that month, without having to work that month. More money in your pocket, plus the potential higher supplement.
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Old 09-14-2021, 08:20 AM   #70
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The CPI-W index, for August, was posted this am. It increased 5.8%. (from 253.597 to 268.387). The September index will be announced announced Oct 13. You may recall the July increase was 6.0%. The SS COLA will be the average of the 6.0%, the 5.8% and whatever the September CPI-W will be.
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Old 09-14-2021, 08:33 AM   #71
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Even if it goes way down next month, there will still be a big increase.
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Old 09-14-2021, 08:38 AM   #72
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I find it interesting that the the financial "newz" folks attributed the very small "pop" in the futures this AM to the "lower than expected increase." Of course what is buried three paragraphs in is that it was 5.3% and not the expected 5.4%. One tenth of one percent? That is headline worthy?
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Old 09-14-2021, 09:04 AM   #73
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Even if it goes way down next month, there will still be a big increase.
That's true. Even if the September CPI-W is 0%, which is extremely unlikely, the COLA would be 3.9%. (6+5.8+0)/3
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Old 09-14-2021, 10:14 AM   #74
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CPI gained .3% in August, down from .5% in July, a meaningful month to month reduction.

If you annualize it is 3.6% versus 6.0%.

This is very good news.
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Old 09-14-2021, 12:53 PM   #75
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CPI gained .3% in August, down from .5% in July, a meaningful month to month reduction.

If you annualize it is 3.6% versus 6.0%.

This is very good news.
Yes, that is a good trend, but still above the Fed's target rate and I don't think they will raise rates for several quarters.
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Old 09-14-2021, 02:17 PM   #76
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They plan to unwind the QE before raising rates. How this effects timing of QE unwind is an open question, but this possibly reduces the immediate need to unwind, particularly with the specter of lower growth.
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