Should Social Security benefits always increase to fully account for inflation?

I’m guessing if we ask seniors, the answer will be 100% yes. After all, inflation eroding fixed income is real and annual COLAs have been promised and are expected.

Social Security benefits have lost 34 percent of buying power since 2000, according to the 2018 Social Security Loss of Buying Power Study released this week by The Senior Citizens League, a nonpartisan senior citizen’s action group. Source:

If we ask today’s working Americans who are paying for those adjustments, the answer may not be so unanimous.

A promise is a promise, so let’s take current beneficiaries and those nearing retirement off the table.

But Social Security is not supposed to be the sole source of retirement income, and realistically not even the majority.

The federal government loses or defers considerable revenue because of various retirement schemes from pensions, 401k plans and IRAs to small business programs. These plans are designed to provide retirement income. For most average Americans if they provide 40% of more income replacement in addition to Social Security, they should be in good shape during retirement.

So, is it too much to ask Americans to plan a retirement income to keep up with inflation as it applies to their spending? At a minimum why should anyone who begins retirement with the maximum Social Security benefit not be able to offset inflation with their own funds?

A person earning $128,000 today and retiring in September 2018 at age 67 receives about $31,164 in annual Social Security benefits and with a spouse $46,746. Such a person should have been able to invest sufficiently to at least offset inflation during retirement … in my opinion.


  1. Half the jobs in America pay less than $18 an hour. Can Trump help?

    That is $3,120 per month, before any taxes are deducted. $2195 after taxes = $26,340.
    In today’s economy does anyone believe that a person with this income, is going to be able to save for retirement. If you live in a high cost of living state, forget it. It is no wonder low income workers have to rely on just SS in retirement.

    As far as a COLA, the numbers are not even close to what the true cost of living numbers would be, if they used the same formula for calculating the COLA that was used in the 1980s.
    You can almost double the official number. At some point in the future all SS benefits will be means tested. I know a retired State Farm Insurance Agent that has over $6,000,000 in his retirement accounts. He gets almost the maximum SS benefit. He will be one of the first to see a cut, once they means test benefits and I do not have a problem with it. He made millions working in a career that paid him 5 times what the average worker made, the cuts will not change his standard of living.


    1. JRATT – I totally agree in your prediction and I may be subject to having my benefits cut one day. I do not believe in the COLA because it robs the SS Trust, and my private pension does not give me COLAs. However since Social Security is a regressive benefit, and the low income people need a higher percentage for their basic needs it may be time just rename the program as the National Retirement Welfare Pension and change the name of FICA to Pension Tax for the Poor. One day the whole benefit will be means tested and no matter how much you paid into it, if you can get the same amount from a pension or 401K then you’ll receive no benefit payment from Social Security.


  2. When Social Security is revamped, right before the payout in benefits craters, one likely element will be denial of Cost of Living Adjustments (COLA’s), for those with total retirement incomes above a certain level.


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