No Social Security Increase

Discussion in '401k, IRA and Retirement' started by My401K, Oct 19, 2015.

  1. My401K

    My401K Well-Known Member

    Joined:
    Dec 2014
    Posts:
    221
    Likes Received:
    3
    So it has been announced that there will be no cost of living increase in Social Security this coming year. Many seniors are not happy about that as the cost of everything, especially health care premiums are going up substantially. What has not gone up is the cost of gasoline. Since Social security is adjusted for inflation, decreases in some material goods on the CPI seems to justify that there is no need to increase Social Security.

    The insult is that with the new medical insurance position many people young and old alike are looking at increases in medical costs that are not directly tied to the CPI. It sets up a real and frightening scenario, one of which I am sure will lead to some sort of Fed ceiling being placed on these insurance carriers. Hardly the stuff of a robust economy, it feels more like a game of three card Monty. Where's the little ball now?
     
  2. Rosyrain

    Rosyrain Senior Investor

    Joined:
    Apr 2014
    Posts:
    673
    Likes Received:
    2
    This is not good news. I am seeing first hand what it is like to be retired through my parents right now. My dad retired last year, and while they planned ahead and are doing fine now, they are constantly worried that the money is going to eventually run out. They even decided not to get dental insurance right away in an effort to watch their pennies. It does not do anyone, even the government, any good not to give a N increase in Social Security for cost of living. Those on it are the ones that deserve it the most.
     
  3. Corzhens

    Corzhens Senior Investor

    Joined:
    May 2015
    Posts:
    933
    Likes Received:
    0
    On the contrary here, there is a pending proposal to increase the social security pension by 2,000 pesos per month to afford the pensioners a stronger purchasing power. But the president of the country is still hesitant to approve the proposal which was submitted by Senator Villar. Maybe the president is timing the signing of approval for the elections in May last year. That's the problem with politics, it always gets in the way of good intentions. My husband is a retiree and he is still waiting for his first pension. He had filed for a claim last month.
     
  4. kgord

    kgord Senior Investor

    Joined:
    Aug 2015
    Posts:
    617
    Likes Received:
    1
    Well I think people have to face the fact that the social security system is stressed to the maximum. It is sad that there is no cost of living increase, but those who are getting social security and enjoying the benefits are better off than future generations who probably won't even have the option available, unless something is done now. Is the glass half empty or half full?
     
  5. pwarbi

    pwarbi Senior Investor

    Joined:
    May 2015
    Posts:
    1,028
    Likes Received:
    5
    There should be a cost of living increase, and I don't see any reason not to give one.

    I'm sure the government can cut back on their free white house garden parties and various other million dollar functions they hold every year, to be able to put that money instead into the welfare system.

    Then again, the people on social security aren't that important to them obviously, if they were they'd be doing more to help.
     
  6. baudwalk

    baudwalk Senior Investor

    Joined:
    May 2015
    Posts:
    1,428
    Likes Received:
    13
    Like it or not, regardless of your age or status or political conservative or liberal stance, Social Security is the third rail. Congressional members won't touch it. The methodology of calculating the cost of living was tweaked a number of years ago, effectively reducing the rate of increase; i'll leave the history research to you as, at this time, what difference does it make? IMHO, in addition to letting the retirement age creep up a bit (now being done), the only rationale solution is to remove the $118k-odd cap and apply the tax to total wage earnings.

    Yea, I know, not popular, safety net, there should be a means test, I deserve it because I paid into it, you don't deserve it because you didn't work and pay into it, develop an alternative federally-managed individual retirement savings plan... blah, blah, blah, yakety-yak don't talk back. This Social Security third rail business is akin to the never-ending Second Amendment gun rights arguements pervading the populace. In both cases, there really are no effective solutions... at least in my lifetime.
     
  7. Corzhens

    Corzhens Senior Investor

    Joined:
    May 2015
    Posts:
    933
    Likes Received:
    0
    That's also my idea - an increase based on the value of money. For simplicity, maybe the social security can base its computation on the value of the US dollar since it is has a stable rate than anything else here. In the 1980s, the US dollar was 22 pesos and now it is 47 pesos. That makes it to around double in value when it comes to the pension for 1980s vis-a-vis the pension at the present time. The usual complaint of pensioners here is that inflation is eating their pension.
     
  8. pwarbi

    pwarbi Senior Investor

    Joined:
    May 2015
    Posts:
    1,028
    Likes Received:
    5
    Well over here in the UK, the government promised to not save money by stopping certain types of welfare for those living on such a low income they are classed as 'in poverty'. Sounds good. What they did instead was increase that limit so those in poverty 6 months ago, are now just above the threshold so can't claim help, that in turn saves them money and they haven't broken their promise.

    End of the day, no matter who you vote for, the government always gets in, and no matter how much we think our vote makes a difference, it doesn't, and that's the same in every country.
     
  9. SteakTartare

    SteakTartare Senior Investor

    Joined:
    Mar 2014
    Posts:
    857
    Likes Received:
    7
    It is yet another example of how Social(ist) Security is a joke. If I get anything from it, it will be nice, but it is not a factor in my retirement planning. I'm not surprised they are not giving an increase, even though the cost of living is going up.

    On a tangent, I see the I series Savings Bonds are now paying the fantastic rate of 0.00%.:rolleyes:
     
  10. baudwalk

    baudwalk Senior Investor

    Joined:
    May 2015
    Posts:
    1,428
    Likes Received:
    13
    Read the gory details on the CPI-W calculations -- https://www.ssa.gov/news/cola/ -- here.
     

Share This Page