Social Security COL raise.

[KFC911]

Originally Posted by wdfifteen

....
For us, the dollar amount increase in cost of the things we actually buy is less that the dollar amount of the COLA adjustment.

^^^^ This. Applies to me and everyone I know personally who is drawing SS. Fint is also FOS regarding historical Federal Reserve interest rates .... We have returned to just slightly above "neutral" which has juiced both housing and equities for WAY too long imo. Lots of folks adverse to equity risks can actually earn something on $$$ they've saved over their lifetime. That said, fint brought politics into this thread, and I know better than to argue with a 'stone .... Fred, Keef, or fint .

[Bob Kontak]

Originally Posted by fintstone

My life is an embarrassment of riches

Not your whole life. Things were pretty lean for you in the way back.

[wdfifteen]

Originally Posted by KC911

.... We have returned to just slightly above "neutral" which has juiced both housing and equities for WAY too long imo. Lots of folks adverse to equity risks can actually earn something on $$$ they've saved over their lifetime.

It's not just people averse to equity risks. A balanced post-retirement portfolio has some interest-based investments. For months we were losing money on equities and earning nothing on interest-based accounts. CDs that were earning .25% in May are paying 4% now. I just transferred into a 4.75% 12 month CD, and I expect them to go higher.

[KFC911]

^^^^ My elderly parents (mom ) can't tolerate the thought of losing more on her monthly statement than she used to earn in a year (exposed in a variable annuity), so I put them in CDs earning just a wee bit when the Fed had come off of zero (as they planned) and the Tariff President spoke, crashing the markets 20% in Dec of '18. They haven't been earning doodly since... I will lock them into 5 yr CDs earning around 5% very soon. I like mom to sleep well at night.....

And she does

What I earn in interest "now" exceeds my SS payments.... and I've just begun to purchase higher yields as lower yielding bonds and CDs mature.

For once, I've timed it just about right .

I sleep well too... except for my Lab alarm

[MMARSH]

Originally Posted by McLovin

Seems like even though we all pay into SS and are therefore entitled to our money back when we retire (that was the deal), SS will in the not too far future be heavily income dependent.
You know, the retired people who the Govt decides don’t “need” it won’t get it.
It’s already kind of starting. I saw my parents’ SS statement, and they’re getting $10k/yr deducted out of it for Medicare insurance costs, based on their retirement income.

I haven't paid into SS since I was 24 years old. I will get nothing, I'm short on credits and fortunately don't need to get them.

[ted]

Originally Posted by MMARSH

I haven't paid into SS since I was 24 years old. I will get nothing, I'm short on credits and fortunately don't need to get them.

Hi Mike!
Same here, retired FAA employee.

[GH85Carrera]

Originally Posted by MMARSH

I haven't paid into SS since I was 24 years old. I will get nothing, I'm short on credits and fortunately don't need to get them.

How is it you never payed? I am self employed and I still pay in. Have you worked for cash all your life? I guess you know who to blame for no SS income. I have been paying in since I was 16. I will have to live to be 150 to get my payments back.

[fintstone]

Originally Posted by wdfifteen

Nice to hear you admit there is something you don't know.

For those who want to take the time to "do the math" and don't know how, there is a rather windy guide to how to make the calculations here:

https://www.indeed.com/career-advice/career-development/how-to-calculate-cpi

Calculating the increase in dollar amount spent on things you actually buy (as opposed to the government's standard market basket reflected in the CPI) is a good way to understand how inflation and the COLA adjustment actually affects you.
For us, the dollar amount increase in cost of the things we actually buy is less that the dollar amount of the COLA adjustment.

What is it that I don't know? whether you buy any food (at home or away from home), gasoline, natural gas, fuel oil, electricity, airline tickets, or anything on credit? I guess it is possible that you buy none of these, but if not, someone is buying them for you (unless living completely off grid or in a homeless encampment).

Wouldn't it be easier to just look up the table the government prints that shows the percent increase in each thing considered under the CPI number like I did (when I listed the things that you must not purchase if inflation does not affect you)?

[fintstone]

Originally Posted by KC911

^^^^ This. Applies to me and everyone I know personally who is drawing SS. Fint is also FOS regarding historical Federal Reserve interest rates .... We have returned to just slightly above "neutral" which has juiced both housing and equities for WAY too long imo. Lots of folks adverse to equity risks can actually earn something on $$$ they've saved over their lifetime. That said, fint brought politics into this thread, and I know better than to argue with a 'stone .... Fred, Keef, or fint .

I am not sure I mentioned politics (unless reality is political). I think that was you.

When inflation decreases the value of money at a higher rate than one can earn interest, thinking that they "actually earn something on $$$ they've saved over their lifetime" is simply an illusion.

I think my observation on Fed funds and CPI were accurate. See below:

[fintstone]

Originally Posted by Bob Kontak

Not your whole life. Things were pretty lean for you in the way back.

Yes...and it was not that far back. It is a long road. But, that is a big part of what makes America great. Even with very humble beginnings, if one works hard for a lifetime and is frugal (practices a bit of delayed gratification) ...they can increase their wealth significantly. For most, it is more a marathon than a sprint. That said, it is certainly more difficult depending on where you start...and the actions of government to create headwinds like stagflation and affirmative action are hard to fight.

[fintstone]

Originally Posted by GH85Carrera

How is it you never payed? I am self employed and I still pay in. Have you worked for cash all your life? I guess you know who to blame for no SS income. I have been paying in since I was 16. I will have to live to be 150 to get my payments back.

Early on, they granted exemptions for certain entities that funded their own retirement. Some of those entities put the same money into stock and bond funds making employee pretty wealthy (in some cases).

[GH85Carrera]

OK, so legally exempt. I presume those exempt employees had a sponsored retirement plan instead.

My dad paid the max rate of SS all of his working career in the military retirement during his 24 years of service. Upon retirement it was all transferred to SSI. He had a comfortable retirement check every month. Of course it all stopped upon his death. He was retired more years than he worked in the Air Force.

[fintstone]

Folks in Federal civil service (CSRS System) did not pay SS either until the mid 80s. They had a very generous retirement system that they contributed to that provides then full COLA as well (but no SS). The newer system FERS is also contributory, but much, much less generous. It has a partial COLA that reduces the value of it whenever inflation is relatively high. It also has a matching 401K and employees pay SS.

Yes. A military retirement is pretty great (but often requires some difficult years to earn). One could certainly enjoy the rewards of their sacrifice for a very long time (and COLA keeps it pretty much at the same buying power). If they continue to work, they can choose to invest or save that money until actual retirement.

[KFC911]

Originally Posted by fintstone

2020 election.

On the 2nd page fint ... and just like your charts.... Selective memory and just as politically FOS as you have always been.

I'm out .... see ya in PARF ...

[stevej37]

Along with the excellent 8.7% benefit raise starting in Jan......Medicare Part B will be less costly.

"The standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, a decrease of $5.20 from $170.10 in 2022. The annual deductible for all Medicare Part B beneficiaries is $226 in 2023, a decrease of $7 from the annual deductible of $233 in 2022."

[fintstone]

Originally Posted by KC911

On the 2nd page fint ... and just like your charts.... Selective memory and just as politically FOS as you have always been.

I'm out .... see ya in PARF ...

Pretty sure this is you:

Originally Posted by KC911

"Is the glass half-fulll or half-empty"?

Fint: "Is that a Republican glass or a Democrat glass?"

God hates deviled eggs btw....

Repent!

[fintstone]

Originally Posted by stevej37

Along with the excellent 8.7% benefit raise starting in Jan......Medicare Part B will be less costly.

"The standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, a decrease of $5.20 from $170.10 in 2022. The annual deductible for all Medicare Part B beneficiaries is $226 in 2023, a decrease of $7 from the annual deductible of $233 in 2022."

Only if the 8.7 percent COLA did not increase your income to the next level?

Then your cost goes up to $230.80 per month plus an increase in Part D.

Of course, the $7 decrease in annual Part B deductible is offset by the even greater increases in Part A costs:

[Crowbob]

Originally Posted by GH85Carrera

OK, so legally exempt. I presume those exempt employees had a sponsored retirement plan instead.

My dad paid the max rate of SS all of his working career in the military retirement during his 24 years of service. Upon retirement it was all transferred to SSI. He had a comfortable retirement check every month. Of course it all stopped upon his death. He was retired more years than he worked in the Air Force.

SSI is Supplementally Security Income. SS is Social Security.

SSI is welfare for disabled people with low income and the elderly.

SS is for retired and/or disabled people who’ve paid in (or had a spouse pay in), like an insurance policy.

I’ve never heard of anything ever being transferred from one to the other.

[GH85Carrera]

OK, I admit great ignorance in SS. I thought SSI was Social Security income. Doh!

All I really know is dad said his military retirement came to in the form of Social Security checks. Back in 1978 when he retired it was likely a paper check. I know he changed to electronic deposit long ago.

I figured SS would be broke by the time I was old enough to draw it. I did start my own retirement savings many years back. The other good thing for me is my wife was a HR director at a local University. She knows all the insurance, Medicare, and SS laws and requirements. I just have her tell me what I should do, as she is a pro at it. I take care of all the household photo needs.

[wdfifteen]

Originally Posted by fintstone

What is it that I don't know?

As you said, you don't know how the "market basket" of goods that I actually purchase compares with the "market basket" of goods that the government uses to compute the CPI inflation estimate.

Originally Posted by fintstone

Wouldn't it be easier to just look up the table the government prints that shows the percent increase in each thing considered under the CPI number like I did (when I listed the things that you must not purchase if inflation does not affect you)?

It would be easier, but not accurate. It's OK to be lazy and use the government estimated national average inflation if you aren't interested in "doing the math" (as so many people here recommend). I'm interested in knowing how inflation actually affects my family, so I do the math.