Social Security

The trend is up for the 2019 Social Security COLA, but so is inflation 😑

The CPI-W for January 2018 was 241.919, a significant increase over the previous months in yellow above. It is also significantly higher than the benchmark average circled in green above. That average is 239.668

The 2019 COLA will be determined by how much the average for July, August and September 2018 exceeds the 239.668 average for the same months in 2017. The total average CPI-W since September 2017 now stands at 240.921 with an upward trend.

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8 replies »

  1. I have been wanting a higher interest saving rate for over a decade now. Yes, I know it comes with higher borrowing rates and prices, but when you have to park a few thousand in a savings account (emergency fund and also day to day stuff) that is paying 0.03%, it sucks. I do shop around for places to park my other non-invested cash and have found savings accounts paying 1.5% and 12-month CDs at 1.8% but that has been only in the last 6 months.

    It is also hard to convince your kids and other people to save when they get nothing for it, so why move it out of the “way too easy to access” checking (read debit card) account. I have earned several thousand of dollars over the years chasing the interest rate and “managing” my money. But with the super low to non-existent rates, most people are too lazy to even try. They see no return on their effort. At least if they raise the rate high enough to earn enough interest to get issued a 1099-INT, they might feel like the effort was worth it.

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    • Of course, any money in a savings account should only be for immediate emergencies. Savings or rather investing for retirement doesn’t belong anywhere near such accounts.

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      • Inflation hits spenders/debtors much more than debt-free savers.

        Savers have suffered historically low interest rates for a decade. Which is also why pension plans are in trouble. Now hopefully, the worm is turning…

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      • The interest rate factor in pensions is more an accounting issue determining liabilities than anything else. Pensions have suffered from underfunding, and the volatility in liabilities on the books plus regulation.

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      • Inflation hits spenders/debtors much more than debt-free savers. Savers have suffered historically low interest rates for a decade. Which is also why pension plans are in trouble. Now hopefully, the worm is turning…

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    • Pension plans are in trouble for a lot of reasons; low interest rates are only a small part.

      Speaking of pension plans, beneficiaries of such have also enjoyed a decade of low inflation which has protected the buying power of fixed (non COLA) benefits.

      Higher inflation and interest rates have a lot of moving parts that are all inter-related. You can’t just look at how much more you can get in an interest bearing investment to say you will be better off.

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