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Or he has a vested interest in accepting the government's version of reporting on this specific topic. You see it all the time with reporting on national security and foreign policy. People with a large emotional stake in the financial markets are going to defend the government's reporting of inflation because they feel it's in the best interests. Retirees are going to be taking the other position for the most part.
I'm sympathetic (not having a great deal of specific knowledge on the subject) to the idea that the index used for social security COLA could be improved somehow to relate more directly to typical retiree spending. Maybe that's something that's needed, or maybe the posters in this thread have atypical expense increases. That's something that could be debated.
But the notion that the government is lying about inflation is just ridiculous, and not at all borne out by any evidence.
you wouldn't want an index based on retiree spending. it would lay the ground work for very tiny increases.
study after study shows that despite what we all think ,retiree spending falls off big time as they age.
that decrease in spending offsets increases in what they do buy and retirement calculators over state greatly both the amount of inflation adjusting needed by calculating a raise yearly is needed equal to the increase in inflation and the savings size needed.
you wouldn't want an index based on retiree spending. it would lay the ground work for very tiny increases.
study after study shows that despite what we all think ,retiree spending falls off big time as they age.
that decrease in spending offsets increases in what they do buy and retirement calculators over state greatly both the amount of inflation adjusting needed by calculating a raise yearly is needed equal to the increase in inflation and the savings size needed.
Retiree spending levels are immaterial; we're trying to capture the inflation rate on items retirees buy.
Edit: I don't mean to say retiree spending is unimportant in general. But just hoping that inflation on retiree goods and retiree spending patterns have errors that just net out is pinning a lot on the hope that things continue the same way in the future. A change in either could throw that balance out of whack, so why not just make the measures correct to begin with, with respect to their own purposes?
the good news is as you age inflation becomes less and less a factor through retirement although at times it may not seem that way..
we tend to buy less and use less as we get older and older so the reduction in what we do not spend on is a bigger savings then the increases in what we do buy.
dollars spent for much of retirement may be very constant with drops in spending offsetting the remaining spending increases..
we tend to spend in a smile shape. we spend more early on in retirement doing things and buying things, then it drops off big time and after 80 or so increases again as healthcare ,charity and gifting pick up.
throw in a fixed rate mortgage or payed off house and the biggest part of your spending can be a bit lower then even the smile shape as well.
retirees in reality need a lot less inflation adjusting then they think they do. so much so that most numbers crunching by researchers show folks may need 10-30% less savings than the amount retirement calculators tell you because they assume adjustments are needed yearly which study after study show is not the case.
the problem only becomes an issue when a retirement is under funded to begin with and that is an individual issue.
if 99% of your budget is committed to non descritionary spending and prices rise there may be nothing you can cut as you age.
but that is really a case of your choice of housing may be to expensive or you have dollars committed to things you can't afford.
in any case underfunding a lifestyle is not an inflation issue as much as a bad planning for retirement issue..perhaps you retired to early and really needed more income from ss as a safety net just because your personal rate of inflation will be different from the cpi price index. just an example and not anyone in particulars case.
the two most popular studies are the ty bernikee study
the actual data comes from census info and surveys
I rather doubt that poor people spend less as they age.
I'd love to see a low-income CPI reflecting the market basket consumed by the chronically poor. (as opposed to the lower middle class living on retirement incomes, who consume differently from the chronically poor)
you wouldn't want an index based on retiree spending. it would lay the ground work for very tiny increases.
study after study shows that despite what we all think ,retiree spending falls off big time as they age.
that decrease in spending offsets increases in what they do buy and retirement calculators over state greatly both the amount of inflation adjusting needed by calculating a raise yearly is needed equal to the increase in inflation and the savings size needed.
I highly highly doubt retiree spending falls off big time for the chronically poor who necessarily cannot smooth their expenditures like the middle class can and does.
in other parts of the country they did not have your experience. in fact we switched to led lighting and new ac units and our utility bills are far lower.
again ,you are taking your personal cost of living and trying to compare it to only a price change index ,that is weighted too.
social security was never meant to be a sole means of support and have to keep pace with someones personal lifestyle. that is what savings and retirement planning is for.
if the ball was dropped for whatever reason and there is no savings that isn't the fault of the cpi.
??? What did they expect burger fippers to do, become Walmart greeters? Did they really expect burger flippers to save and invest adequately?
Maybe there is no savings because the rent is 2 damn high. (I'm paying 52% of income)
The retirees you speak of that can't or do not cut are plain out of luck.life does not really make exceptions for those who failed financially.
Perhaps they too are living above their means. May be they need a roomate for cost sharing. Maybe work if they can .
As i tell you over and over for some there is no answer.
If they can not improve their own situation no one is doing it for them.
??? What did they expect burger fippers to do, become Walmart greeters? Did they really expect burger flippers to save and invest adequately?
Maybe there is no savings because the rent is 2 damn high. (I'm paying 52% of income)
The burger flipper I know that retired did it with SS, Medicare, SNAP, Lifeline free phone, rent vouchers, retiree bus pass, and occasional off the books work. Does better than some I know that worked hard to invest.
freemkt knows the drill all to well . he complains and complains but he is living above his means . if he is not able to do something about it then he needs a roomate and to cost share.
he needs to spend less time posting about his poorness and maybe collect soda bottles and cans if he has to.
but he doesn't and re-posts in every thread with his tales of woe and what about him.
sorry but no sympathy here.
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