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when you average out homeowners who have well above median incomes generally , with folks without mortgages the average is going to be way lower for the homeowners as a percentage of income .
the debt percentage will show reduced for homeowners but it will show higher income then median .
We've discussed in another thread that the argument about the validity of the cpi used to figure SS COLA boils down to the lower income retired living mostly or entirely on SS IS vastly more affected by no COLA than the retiree that has SS for what it was planned to be for, supplemental income added to your primary savings and or retirement income. So of course the lower income retiree is going to cry "unfair" louder than the retiree that says "I'm really gonna miss that extra $20 a month". $20 a month is a lot to someone that only has $1.50 left at the end of each month, LIVING entirely on SS. Its just one less lunch out for the well off retiree, even though the well off retiree likely has a much higher SS (because he paid more in to the system, and saved more because he earned more over his career) and a larger COLA, possibly even double that of the lower SS retiree. So It becomes a moot point of whats fair? A COLA that is based on the actual percentage of increases against their income,which is obviously a much higher percentage for Mr. Living on $20k a Year, or a "lets be fair", and base it on a statistically neutral cpi based on a defined hypothetical basket of goods. The people that lose the MOST money in the long run are the high SS retirees, because the actual dollar amount of the same percentage is higher, and that higher amount compounds even more each year. They are also the ones that it affects the least, by definition. But whether it affects you or not is totally subjective, and not a reason at all in deciding who gets how much. But the arguments about the "unfairness" of the cpi used are totally subjective.
Clearly, in a system known to have financial shortcomings, the logical choice is the latter, as that reduces the drain burden significantly more. Even with the already incorporated means testing built in to the SS system, the SS benefit is still a major income source to "high" earners in the 25 ~28% brackets, and they paid the highest percentage of their income, for the lowest rate of return, so awarding a COLA primarily to those that "need" it the most, would be increasingly unfair.
Last edited by Perryinva; 10-13-2015 at 08:13 PM..
Nor should there be. The increase in the cost of living measured through the CPI is extremely low. Now, I can't wait for all the people who say that "the government figures are a lie" to speak up.
So now they use the excuse of falling oil prices as the reason for no COLA? I guess they assume people don't remember anything, but I remember distinctly the rationale in years that oil prices climbed, for the gubmint to NOT include these increases in inflation, saying that factors responsible for their increase were different than factors responsible for increases in prices for other items, such as food, housing, etc. Or some equally ludicrous argument.
The bottom line, IMO, is inflation is defined by the whims of the gubmint ( the same gubmint that insists its debt ceiling be raised yearly to accomodate its exponentially ever increasing spending habits). This despite the very real experience for millions of taxpayers of seeing their wages losing ground for being able to provide even the essentials due to the very real increases in the cost of food, housing, energy, health care, etc.
That said, I must admit I have no objection to no COLA increase in our SS checks next year, especially if such measures will do anything to extend the life of the SS program so that taxpayers currently working and contributing to the program ( I would be included among that number as a part time consultant even though I collect SS as a retiree as well) will get it when they reach retirement age. But then I am in a position where thanks to retirement income ( and part time income minus taxes and 15.8% for SS/Medicare deductions), in addition to the SS income, that no COLA won't affect me as much as it might others who count on SS as all or most of their income. But then, it might be appropriate to remind one and all that for most of these folks, there will be no increase in their Medicare Part B premiums. At least that is something.
that is another myth about the cpi . energy costs were never put in or taken out to juggle colas or inflation adjusting on TIPS . they always use the all item index's either cpi-u or cpi -w , not the core index less food and energy .
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Has the BLS removed food or energy prices in its official measure of inflation?
No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI.
Most importantly, none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI for Urban Wage Earners and Clerical Workers (CPI-W). Individual income tax parameters and Treasury Inflation-Protected Securities (TIPS) returns are based on the All Items CPI-U.
I think for people that have huge medical expenses every month, that keep going up on them. Or they pay rent for an apartment, or Mobile Home Lot rent and that goes up yearly. Then I think people that fall in that segment of retiree, are really hurt by not getting COL. They just don't have any control on what is going out, especially the medical.
social security was never meant to be the sole means of support . it was only insurance if you failed .
the whole concept was never meant or designed to support someone 100% and to track their individual living situation .
that has always been the yoyo system . (you're on your own ) to develop the rest of your support and inflation protecting .
the fact someone has failed at developing the rest of their plan for income has little to do with cola's and social security's roll in the over all plan . .
yeah i know many retirees live on just social security , i get that , but for what ever reasons that is an individual issue , no matter, what the reason is for failing at developing the rest of their income plan .
Last edited by mathjak107; 10-14-2015 at 07:12 AM..
COLA complaints should be directed to whomever determined what goods and services are included in the calculation, and how prices of such are determined. What politicians, at the time, had influence over the calculation, when the current formula was put in place? To me, this is the only way one can place any blame on political forces. The method used is strictly an input of numbers into a formula, that is calculated monthly, with career non-partisan civil servants doing the leg work.
It is interesting the number of SS recipients, that feel as though a group of elected officials gather every October, and figure out how they're going to limit the annual COLA. This mindset is widespread among seniors and the disabled. Even more interesting among those that believe this, are the ones that are far right politically, whose supported politicians are the very officials who would limit COLA's if given the power to do so.
Belief in politically influenced annual COLA's, is the equivalent of believing that football referees have the ability to change the point values of touchdowns and field goals from game to game.
social security was never meant to be the sole means of support . it was only insurance if you failed .
the whole concept was never meant or designed to support someone 100% and to track their individual living situation .
You are correct about that, but the reality is that there are lots of people out there getting by on little else. It's too late to tell them they shouldn't do that. I am not sure what the right answer is, but from my perspective it can't just be "sorry".
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