Government Manipulating Downwards Your Social Security COLA.

[John Drake]

Interesting article from the Motley Fool on how government figures hide the actual 20 percent inflation rate for SSA recipients by catagorizing their costs like they're young workers.

 

Quote

To elaborate, the CPI-W considers inflation across eight major product groups, which are weighted based on workers' spending patterns. But workers are usually young and tend to spend money differently than retired workers on Social Security. For instance, retirees generally spend more on housing and medications and less on transportation and education.

 

Put differently, from the perspective of retirees, the CPI-W puts too little emphasis on housing and medications and too much emphasis on transportation and education. That is particularly problematic because housing and medication costs have increased more quickly than the CPI-W year to date, while transportation and education costs have increased more slowly.

 

 

  https://www.fool.com/retirement/2024/09/06/social-security-2025-cola-bad-worse-news-retirees/

 

[TedG]

It’s not the CPI-W that screws you.  It’s the methodology.  The CPI-W has inflation over 20% since Jan 2021.  The last COLA was 3.2%.  The dept of SS averages the monthly CPI changes from Q3.  If the number were based on the start of Q3 in 2022 and the end of Q3 in 2023, the COLA would have been 3.4%.

 

Inflation from the start of Q3 2022 to the end of Q3 2023. 

July   2022    292.219

Sept 2023    302.257

 

302.257 - 292.219 = 10.038    10.038/ 292.219 = 3.43%

 

The 2022 COLA was 8.7% with the averaging.   Using the start of Q3 2021 to the end of Q3 2022 inflation was 8.98%. 

 

They are slaving off a few tens each year.   

 

 

 https://www.ssa.gov/oact/cola/latestCOLA.html

[exant]

SSA.GOV

https://www.foxbusiness.com/politics/social-security-crisis-beneficiaries-face-21-benefit-cut-without-reforms-says-cfrb