Posted on 10/12/2022 12:02:16 PM PDT by Red Badger
'With many older people choosing to live in suburban areas or rural areas, some will benefit more...'
(Headline USA) On Thursday, the U.S. government is set to announce how big a percentage increase Social Security beneficiaries will see in monthly payments this upcoming year.
Some estimates say the boost for more than 65 million Social Security beneficiaries may be as big as 9%.
It’s virtually certain to be the largest raise in four decades and will add more strain on the welfare program’s trust fund, which is expected to expire within the next decade, even as younger taxpayers continue to invest money into the system that they are unlikely ever to see paid out.
The latest annual trustees report for Social Security said its trust funds that pay out retirement and survivors and disability benefits will be able to pay scheduled benefits on a timely basis until 2035. After that, incoming cash from taxes will be enough to pay 80% of scheduled benefits.
This year’s boost also is likely to fuel even more inflation, even as the Federal Reserve has aggressively begun hiking interest rates to offset the existing inflation caused by Democrats’ reckless spending sprees.
The increase is one-size-fits-all, which means beneficiaries get the same raise regardless of where they live or how big a nest egg they may have.
They’re also permanent, and they compound. That means the following year’s percentage increase, whatever it ends up being, will be on top of the new, larger payment beneficiaries get after this most recent raise.
Like the inflation that the increase is intended to address, the new cost-of-living adjustment may be the highest since 1981, when Social Security payments went up by 11.2%.
Automatic annual cost-of-living adjustments didn’t begin for Social Security until 1975, after a law passed in 1972 requiring them.
Last year’s increase of 5.9% was itself the biggest in nearly four decades.
Since 2000, it’s averaged 2.3% as inflation remained remarkably tame through all kinds of economic swings. Since the 2008 financial crisis, the U.S. government has announced zero increases to Social Security benefits three times because inflation was so weak.
Critics, however, say the data the government uses to set the increase doesn’t reflect what older Americans are actually spending, and thus the inflation they’re actually feeling.
The COLA adjustment is tied to a measure of inflation called the CPI-W index, which tracks what kinds of prices are being paid by urban wage earners and clerical workers.
More specifically, the increase is based on how much the CPI-W increases from the summer of one year to the next.
People generally pay more attention to a much broader measure of inflation, the CPI-U index, which covers all urban consumers. That covers 93% of the total U.S. population.
The CPI-W, meanwhile, covers only about 29% of the U.S. population. It has been around longer than the CPI-U, which the government began compiling only after the legislation that required Social Security’s annual increases be linked to inflation.
Some critics have argued for years that Social Security should change to a different measure, one that’s pegged to older people in particular.
Another experimental index, called CPI-E, is supposed to offer a better reflection of how Americans aged 62 and above spend their money. It has historically shown higher rates of inflation for older Americans than the CPI-U or CPI-W, but it has not taken hold. Neither have other measures compiled by organizations outside the government that hope to show how inflation affects older Americans specifically.
Recently, the CPI-E has shown a bit milder inflation than CPI-W or CPI-U.
To calculate the CPI-E, the government pulls from the same survey data used to measure the broad CPI-U. But there are relatively few older households in that data set, meaning it may not be the most accurate.
All indexes give just a rough approximation of what inflation really is. But the more pressing challenge may be that if the government switched to a different index, one that showed higher inflation for older Americans, Social Security would have to pay out higher benefits.
That in turn would mean a faster drain on Social Security’s trust fund, which looks to run empty in a little more than a decade at its current pace.
Through a complicated formula that takes into account several factors, including how much a worker made in their 35 highest-earning years. Generally, those who made more money and those who wait longer to start getting Social Security get larger benefits, up to a point.
This year, the maximum allowed benefit for someone who retired at full retirement age is $3,345 monthly.
“The COLA doesn’t take into account where you live or your actual spending patterns,” said William Arnone, CEO of the National Academy of Social Insurance.
“For some people, it’s an overstatement of cost of living for, say, small towns in the Midwest versus urban areas like New York, D.C. or Chicago,” he continued. “With many older people choosing to live in suburban areas or rural areas, some will benefit more” than others from the same-sized increase.
How can part A go up? Isn’t part A free? I’ve had it for 4 years and never paid a dime for it. You get it automatically when you start taking SS payments.
Social security is supposed to be adjusted for inflation.
If there has been 9% inflation, then it shall be adjusted by 9%. Nothing special, no pandering. Really!
Social security is actually pretty low, a lot less for most than the $15 dollar and hour job!
People living on Soc Sec, only, are poor!
He’s not changing my mind by dangling money in front of me.
So Joe personally determined what the yearly increase in Social Security will be?
`````````````````````````````````````````````````
He will play it that way, you may count on it. Never mind that a large increase is indicative of a large inflationary economy in a major recession that’s on the precipice of a huge depression.
When gas prices sky rocketed, PedoJoe said that the President has no control over gas prices, when they fell very slightly, well that was all his doings.
Part A is free.
Many posters are not explicit when they say “Medicare”.
Obviously there are many pieces A,B,C, Supplements etc—some .gov, some private—mass confusion if people are not specific.
You raise a good point. It had been a while and I didn’t
remember Part A fees clearly. I looked it up, and you are
right generally.
I’m not sure what they are referring to.
If you didn’t have your full quarters in, you may have
to pay a fee for Part A. We do, so we don’t see one.
It could be they are addressing people who work and
need to pay some taxation related to earning too much.
There may then be a Medicare Part A fee also, but that’s
abovemy pay grade. I don’t honestly know.
Do I pay bills? What a dumb question.
The inflation rate is close to 17%; the SSA COLA will be peanuts.
I would be angered if the established rules changed while I was a user. If the rules changed for users 15 years in the future,, on a gradual basis, so it could be planned for by those impacted, I would be less opposed.
```````````````````````````````````````````````
Like “Means Testing”? Any means testing is robbery, plain and simple. I get a large check, as compared to probably most recipients but paid in a large amount, also comparatively speaking.
.
“More like 2-3-4%, if we don’t financially collapse, by then.”
My question was in response to your comment, it made no sense, so asking if you paid bills was a valid response.
Unfortunately that is what bad laws like the SS Act produce — bad reform in some cases. How do we go about reforming a bad system except by legislation? I don’t want it reformed by the executive branch just doing what they want politically. We have to use legislation, it is the only tool we have.
Medicare is going to increase more than whatever % increase SS goes up so people on SS will actually lose out.
........................................................
Decreases this coming year.
Last years premium increase was a percentage of the previous year’s premium and not on the amount of gain of monthly benefit and therefor did not erase the amount of gain of the benefit, unless the benefit was very low to begin with.
My elderly aunt was getting a ss check (several years back) of $17, due to having worked a short period of time under ss, then she worked for USPS (exempt from ss) for many years and retired under their pension system, her piddling ss check would be long gone if she were still living.
I’m part of a two person construction business with my best friend and work there as contract labor/self employed-it is my perfect idea of work-physical to keep fit, utilize my job safety/worker safety skills and we barter if the customers have no cash-and this “raise in benefits” is not going to help me or my compadre at all-he and I will be paying more self-employment tax, it will raise monthly mediscare premiums, and there is the gas for work-we both drive 4x4s out of necessity-etc-most working class people like me will be lucky to break even because of the way prices on gas and food, etc are rising-this was just another stupid democrat idea-bread and circuses for the roman mob-many of us are better off if they will just leave us the f*** alone to make a decent living wage...
Part D here last year went from about $8/month and wanted $150/month to cover a $10/month(or lower) generic. Changed to Silverscript....decent so far but maybe they’ll want $$$$ this renewal round.
Well, if the mediscare premiums really go down, with that $4.00 I can buy a can of my favorite ground Colombian coffee every 2 months rather than the cheaper coffee from some other country-a small pleasure, but I guess it is all we get...
Thank you!
Makes perfect sense, if you'd read it.
‘They’ have to get the Cloward-Piven decimation of America one way or another or in many ways.
I’m hesitant to change because I have no co-pays on most of my meds. I’m now on 4 per month (bp, thyroid, cholesterol, and a pill 2 strengthen my bones) and I’m sure they are more than $63/mo., but I don’t understand it more than doubling in one year...sigh
this is absolute bullshit ... SS COLA is determined solely by a longstanding mathematical formula ... a large COLA simply means inflation is out of control ... and THAT dementia joe is responsible for ...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.