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Early 2022 COLA Watch!
We’re only two days into Spring, but the pundits are already opining on next year’s Social Security Cost-of-Living Adjustment (COLA). Take it as just what it is…a very, very tentative projection based on what’s happened over just the past few months, but the editorial staff at The Week suggests in an article on their website that beneficiaries could be swooning to the tune of a 3% in January of 2022. Not to get too crazy with the numerical side of this, but that would be a 230% jump over 2021’s paltry 1.3% adjustment…but it’s not a purely rosy picture, since it means price increases are the cause of the adjustment. Check out “The Week’s” post here…
ss should be much higher for retired people medical is too high to have it
Joseph:
Your point is well taken. As we reported on this site in a previous article (see article posted 12/14/2020 titled “Social Security’s COLA: Why It’s Not Working Well for Seniors”), the current CPI-W basis for calculation of yearly cost-of-living adjustments “does not sufficiently weigh the costs most important to seniors, since it gauges the spending patterns of a broad range of households without regard for household ages. Since medical expenses lead the way as a cost category that disproportionately affects Senior households, it’s easy to see that a one-size-fits-all approach has a tendency to negatively affect Senior households.” The post also suggests “a revised measurement, CPI-E, where “E” stands for elderly. Under CPI-E, spending areas more common to Seniors would be given more weight. Aside from this, the Association of Mature American Citizens (AMAC) has proposed in its Social Security Guarantee a tiered approach in which annual adjustments are certain and are tied to household earnings in a structure that guarantees annual benefits for all while solving the Social Security solvency problem.”
Thank you for your comment!
Gerry Hafer
AMAC Foundation Social Security Advisor
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government.
If we were using the CPI-E, what would our COLA have been this past year instead of 1.3%?
Darrell:
One study we are aware of presents this conclusion: “Using the CPI-E to determine the Social Security COLA would increase the expected average COLA by about 0.2 percentage points per year.” That quote is from an article issued by the National to Preserve Social Security and Medicare (NCPSSM), and appears to be consistent with other studies we’ve seen. The full NCPSSM article can be found here: https://www.ncpssm.org/documents/social-security-policy-papers/the-cpi-e-a-better-option-for-calculating-social-security-colas/
Gerry Hafer
AMAC Foundation
CONFIDENTIALITY NOTICE: The contents of this message, including any attachments, are confidential and are intended solely for the use of the person or entity to whom the message was addressed. If you are not the intended recipient of this message, please be advised that any dissemination, distribution, forwarding, printing, copying, or use of the contents of this message, and any attached documentation, is strictly prohibited. If you received this message in error, please notify the sender. Please also permanently delete all copies of the original message and any attached documentation. The opinions and interpretations expressed in this message are the viewpoints of the message’s author, a trained advisor accredited under the National Social Security Advisors program of the National Social Security Association, LLC (NSSA). The author, the NSSA, and the AMAC Foundation are not affiliated with or endorsed by the United States Government, the Social Security Administration, or any other state government.