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With 93 poll responders to date, I think the sample size is adequate to compare the poll stats with national stats:
1. This poll responses:
I depend on SS for 85 to 100 percent of my income. 11 11.83%
I depend on SS for 70 to 84 percent of my income. 4 4.30%
I depend on SS for 55 to 69 percent of my income. 8 8.60%
I depend on SS for 40 to 54 percent of my income. 17 18.28%
I depend on SS for 25 to 39 percent of my income. 21 22.58%
I depend on SS for zero to 24% of my income. 32 34.41%
Social Security accounts for about 38 percent of the aggregate income of those aged 65 or older
.....
For the aged poor, the picture is quite different. Social Security accounts for about 77 percent of the income of aged households with annual incomes of less than $10,000. Moreover, without Social Security benefits, the number of aged households below the poverty level would rise from the current 14 percent figure to 51 percent.
Since I don't have access to the US SS stats with more granularity, I will reduce the granularity of this current poll to compare with the US stats.
1. This poll % households who depend on SS for >70% of income: ~16%
US poor aged households depends on SS for 77% of income: 14%
2. This poll % households who depend on SS for 40-70% of income: ~27%
US average households who depend on SS for 38% of income: 46%?? (I just substract 14% poor folks from 100 then divide by 2 to get the average. It's very crude math but it's the best that I estimate)
3. This poll % if households who depends on SS for 0-39% of income: 56%
US average households who depend on SS for 0-37% of income: 46%??? (see explanation in 2.)
So based on this limited 97 sample size, this forum responds came from roughly the same % of 'aged poor' as the general population whereas there appeared to be more affluent seniors in this forum than the general population.
It is interesting to compare these stats with the stats below:
For example, a 65-year-old who retired in 2013 with a lifetime of “medium” earnings (about $43,720 in 2012) would receive about $18,230 a year, which would replace about 42 percent of past earnings.
A “low” earner who made about $19,670 in 2012 would receive about $11,070, which would replace about 56 percent of prior earnings.
A worker who always earned the “maximum” taxable amount ($110,100 in 2012) would get benefits that replace about 26 percent of prior earnings.
So, one could guess that people who depends on SS for only ~25% or less of their income were high-wage earners who are likely to substantial savings and/or pensions. For those folks, they would not be at all affected or worried the lack of the measly COLA in 2016.
It's clear that if one depends on SS for >70% of their income, one would feel the impact of no COLA.
It's clear that if one depends on SS for >70% of their income, one would feel the impact of no COLA.
There is no impact if there is no increase in the cost-of-living to begin with. Your monthly benefit simply continues to buy the same things it always did. There has been no purchasing power lost to inflation that a COLA would go to make up for.
There is no impact if there is no increase in the cost-of-living to begin with. Your monthly benefit simply continues to buy the same things it always did. There has been no purchasing power lost to inflation that a COLA would go to make up for.
I'd agree with your assertion only if the right CPI is used for SS COLA adjustment. I'm not an economist and have not done much reading let alone researching into this issue but the below explanation appears plausible.
In January of each year, Social Security recipients receive a cost of living adjustment (COLA) "to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)".[5] The use of CPI-W conflicts with this purpose, because the elderly consume substantially more health care goods and services than younger people.[6] In recent years, inflation in health care has substantially exceeded inflation in the rest of the economy. Since the weight on health care in CPI-W is much less than the consumption patterns of the elderly, this COLA does not adequately compensate them for the real increases in the costs of the items they buy.
P.S.
I completely agree with mathjak's statement below. Some may not be affected but others may be. Not all SS recipients are covered by Medicare and some may spend more on healthcare than others so if the SS COLA does not reflect the increase in healthcare cost, these individuals would definitely feel the pain.
Quote:
Originally Posted by mathjak107
except in the case of looking at ones own personal cost of living . the 1500 mini economies that exist in this country are all impacted differently .
Yes I paid into SS all of my working career, I will receive full SS benefit.
When I went through TAPP, I was told that my Navy check would be reduced, when my SS started.
When I wrote "offset", I meant there was no offset from my navy retirement, not SS. I'm not sure why you were told your retired pay would be offset, but, FWIW, I have been drawing navy retirement since 1989 and when I began drawing SS in Jan 2014, my navy retirement was not affected. Again, I am not sure why the TAP rep told you that. I have never heard of such a thing, not that it isn't true, stranger things have happened.
Now, federal retirees who retired under the old retirement system, CSRS, will have an offset in their SS, should they be eligible.
I would think you could contact DFAS and ask them to verify whether or not your retired pay will be subject to any kind of offset. It's certainly worth persuing if only for your peace of mind.
I'd agree with your assertion only if the right CPI is used for SS COLA adjustment. I'm not an economist and have not done much reading let alone researching into this issue but the below explanation appears plausible.
The argument you raise is so old that BLS has already long produced an unofficial CPI-E with weights that reflect the purchasing patterns of seniors. But the end results are all but indistinguishable from those of the CPI-U or CPI-W. While seniors do spend more on some categories of goods and services, they spend less on others, and at the end of the day, it almost all gets lost in the wash.
both ty bernicke and the later sun life study confirmed that most seniors are effected very little by inflation .
they stop buying things and doing things as they age that what they no longer buy or do covers the increases in what they do.
the wild card the last few years has been healthcare costs which have been rising a lot and sucking up those dollars that are supposed to absorb those price increases on the other goods and services .
jury is still out on that supposed smile shaped spending pattern.
When I wrote "offset", I meant there was no offset from my navy retirement, not SS. I'm not sure why you were told your retired pay would be offset, but, FWIW, I have been drawing navy retirement since 1989 and when I began drawing SS in Jan 2014, my navy retirement was not affected. Again, I am not sure why the TAP rep told you that. I have never heard of such a thing, not that it isn't true, stranger things have happened.
Now, federal retirees who retired under the old retirement system, CSRS, will have an offset in their SS, should they be eligible.
I would think you could contact DFAS and ask them to verify whether or not your retired pay will be subject to any kind of offset. It's certainly worth persuing if only for your peace of mind.
I think I got it cleared up now.
My TAP rep was a federal retiree [under CSRS]. In googling around I find that many military retirees were told something similar. But it turns out that regardless of what age we start getting SS benefits, at 65 we enroll in Medicare 'B' and that $93/month is deducted from our DOD pension.
Even though I will be getting my full SS benefit, my DOD pension will be larger.
The argument you raise is so old that BLS has already long produced an unofficial CPI-E with weights that reflect the purchasing patterns of seniors. But the end results are all but indistinguishable from those of the CPI-U or CPI-W. While seniors do spend more on some categories of goods and services, they spend less on others, and at the end of the day, it almost all gets lost in the wash.
I would love to see more recent data and study showing that the discrepancies between CPI-E and CPI-U especially with respect to health care cost have been addressed.
Like I stated before, I have not done much reading and research on this topic, below is most recent article I could find on this issue dated October 2012 in which AARP address what impact the proposed changes in COLA would affect senior citizens. If anything, whatever changes that our politicians were considering would not be befeficial to SS recipients
The Table I of this article (2009–2010 Consumer Expenditure Survey weights) shows the relative importance of Medical care being only 7.1 in CPI-U but 11.6 in CPI-E.
I surely hope that someone will come up with a more recent study showing that the trend shown in this 2012 article had been reversed
Quote:
Those who rely most heavily on Social Security and who are the poorest will experience the biggest reduction in their income and consumption and therefore their economic wellbeing. For example, someone who relies entirely on Social Security will experience an 8.4% cut in total income after 30 years using the CCPI-U, whereas someone who relies on Social Security for only one-quarter of their total income will experience a cut in total income of 2.1% (= 8.4% * ¼) after 30 years.
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but, FWIW, I have been drawing navy retirement since 1989 and when I began drawing SS in Jan 2014, my navy retirement was not affected. Again, I am not sure why the TAP rep told you that. I have never heard of such a thing, not that it isn't true, stranger things have happened.
