Social Security

2018 Social Security COLA

The July CPI-W decreased 0.1% and the annual increase is only 1.5% over a year.

That means the August and September CPI-W must increase significantly in order to reach the Trustees predicted 2.2% increase for 2018

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8 replies »

  1. We need a good Cola for a change. Everything has gone up. food has risen. Gas is going up, prices on appliances have risen. Medicare went up the same amount that we got for the Cola. Exactly so we got nothing last year. Medicines go up and some so much so they should be fined for doing that; Epi Pens, Insulin etc. And we need more of them as we age.

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    • If there is a COLA for 2018 it too will be consumed by Medicare premium increases for most people. There is a lot of catching up to do.

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  2. No or low social security COLA is a good thing. The COLA is meant to keep peoples buying power constant from year to year by offsetting the effects of inflation. In theory they will be no better or worse off. Using the average $1404 benefit a 2% cola increase equals a $28 increase. On the other hand, as economists like to say, someone who saved $100,000 for retirement would see his buying power diminished by $2,000.

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    • Jack B – Only if he spent the money all in one year. If he has it invested and gets a 5% gain, he is up $3,000 for the year. Sadly the guy with only the $1404 benefit, has to spend all of his every year. Not saving for retirement does have consequences.

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      • JRATT – You are correct that “IF” you are able to get a 5% return on investment you would be $3000 to the good with 2% inflation. But look at it this way, if there was 0% inflation there would be no need for a COLA, social security beneficiaries would have the same buying power that they had the previous year and you would have the full buying power of $5000 not $3000 on your investment return. In the real world 0% inflation is a pipe dream with central bank monetary policy trying to achieve 2% inflation. All I am saying is that low COLAs are not necessarily a bad thing.

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    • Jack B – There is never really zero inflation, most prices go up, some stay the same and a few like gasoline lately has come down. But I do not buy as much gasoline in retirement. From July 2014 to Jan 2017 I did not buy any, walked or used public transportation. That is why living in a state like MT with no sales tax helps stretch my retirement dollars. We make choices every day that affect our budget, sometimes it is wiser to not make a purchase. The formula used to track inflation is flawed, because every one does not buy the same goods, or live in the same area.

      In Jan 2015 I received a $24 COLA. I went to Sam’s Club 3 Jan and the price of milk, eggs, bacon, bread, coffee, all had price increases. I saw this when I was in the USAF, every time we received a raise, you would go the base exchange and the price of haircuts would cost more.

      Low COLAs hurt the poor and people living in high cost areas, but it is what it is. I adjust my budget all the time and even save up for stuff, so I do not have to use credit as much.

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      • Be glad you get a COLA at all. With very few exceptions the only people who get a COLA other than SS are those with some form of government pension. I have been retired seven years with no COLA and never will have. In addition, again with very few exceptions no workers except gov’t workers can expect any pension at all.

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  3. 1.5% will still be much better than last year’s COLA. Fuel cost may tic higher over the next 2 months and bring the COLA closer to 2%. Which would be good since I by way less gasoline in retirement. Anyway I will adjust my budget as always, no matter what the COLA ends up being.

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