The 2020 Social Security COLA is expected to be low — and that’s not even the worst part

[Applewood]

The 2020 Social Security COLA is expected to be low — and that’s not even the worst part

The COLA for 2020 won’t be announced until next month, but one analyst expects just a 1.6% adjustment next year, down from 2.8% in 2019. Mary Johnson, the Social Security and Medicare policy analyst at the Senior Citizens League, a nonpartisan advocacy group for retirees, has been tracking COLA since 1996. She anticipated the 2.8% adjustment for last year the month before the Social Security Administration announced its COLA (and estimated correctly).

The 1.6% adjustment would amount to roughly $23 a month for someone receiving the average retirement benefit of $1,460, Johnson said. COLAs have been averaging 1.4% over the last decade, half of the average 3% it was between 2000 and 2009. Last year’s COLA was the first big hike since 2012, when it was 3.6% (in 2018, COLA was 2%, and in 2017, it was 0.3%).

But the significant drop in COLA between 2019 and 2020 may not be the worst part. Social Security as it stands bases its adjustment on CPI-W, the consumer-price index and buying patterns of younger workers. But young workers and retirees don’t spend their money the same way. “They will spend less on health care and perhaps housing, and those are the two expenses that really make a difference for older Americans,” Johnson said. Young workers might spend between 7% to 10% of their money on health care, compared with older Americans, who can expect to spend 12% to 25% on it, she noted.

https://www.marketwatch.com/story/the-2020-social-security-cola-is-expected-to-be-low-and-thats-not-even-the-worst-part-2019-09-26?mod=mw_theo_homepage

[IsailedawayfromFR]

Keeping COLAs low is one way to reign in some of the problems with SS.

It cannot continue going up forever as it is now.

And that is coming from a recipient.

[Applewood]

Keeping COLAs low is one way to reign in some of the problems with SS.

It cannot continue going up forever as it is now.

And that is coming from a recipient.

Those COLAs are useless anyway.  Most of the time what little we get is eaten up by something, usually an increase in Medicare A.  So what good are they? 

By the way, didn't we get 0 from "Zero" some years?

[Hoodat]

Keeping COLAs low is one way to reign in some of the problems with SS.

Social Security itself is the problem.  It is a  fraud greater than anything Marx or Lenin could have ever put upon us.  If not for Social Security, I would be looking a retirement account containing a couple of million dollars on my 65th birthday which would leave a sizeable inheritance to my kids and grandkids in case I died early.

[Applewood]

Social Security itself is the problem.  It is a  fraud greater than anything Marx or Lenin could have ever put upon us.  If not for Social Security, I would be looking a retirement account containing a couple of million dollars on my 65th birthday which would leave a sizeable inheritance to my kids and grandkids in case I died early.

You're right about that.  Notice how government programs never work out the way they are supposed to. 

If government wanted people to have a pension, SS should have been set up as a temporary program.  A certain amount withheld to start a savings or for the person to do with it what he/she wills.   Should not have been a monthly check for decades and it should not have been expanded to include people who never worked (paid into SS).  And whatever happened to that "lock box" seniors were promised so politicians wouldn't raid the money for their pet projects? 

[IsailedawayfromFR]

You're right about that.  Notice how government programs never work out the way they are supposed to. 

If government wanted people to have a pension, SS should have been set up as a temporary program.  A certain amount withheld to start a savings or for the person to do with it what he/she wills.   Should not have been a monthly check for decades and it should not have been expanded to include people who never worked (paid into SS).  And whatever happened to that "lock box" seniors were promised so politicians wouldn't raid the money for their pet projects?

Algore took the lockbox and developed a plan to get rich off peddling renewables.