Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I'm running budget numbers and it seems 40% of my expenses are not affected by inflation so as long as my food/gas/necessities don't go up too much more than the 5.9%, the COLA will more than cover the increase. In fact, a lot of my monthly outgo is rather discretionary.
What are your thoughts - given the choice? Which scenario would you rather have?
There are other factors so just consider your personal retirement financial situation.
Colas will never match anyone’s personal cost of living since the CPI is only a price change index , not a personal cost of living index.
For many retirees their spending follows a smile shape …..it is higher during the early go go years of retirement, then they fall off during the slow go years as we don’t do or buy what we used too.
Then spending ramps up in the no go years as higher health care costs increase things .
Much of what is no longer done or bought pays for a lot of went up so retiree inflation can be far lower than we think .
There is no comparison to having that cost of living increase as a benefit
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,744 posts, read 58,090,525 times
Reputation: 46231
Take the money and RUN!
Invest / save / spend it wisely... it is not a 'bonus', it is a calculated increased based on historical data.
You can always spend it on Health Care (unexpectedly), or give it away.
There is not a checkbox option for "I don't want inflation".
I can't imagine how my life / spending is about to change! ($100 / month previous groc and entertainment + 100 flights / yr for 'fun'. Fortunately, I can still brew free fuel)
No more FREE Frosties, buy your Boo Books while they are still available! And add a $2 Keychain coupon for all of 2022.
I note some Fast Food no longer posts prices on their "$1 menus". Chili and Tacos doubled in price last month. I can do without either, and we (USA) are VERY lucky to have quite inexpensive food, drink, fuel, transportation.
Last edited by StealthRabbit; 11-05-2021 at 04:04 PM..
Your cola is based on last year's inflation numbers and is no indiction of the future.
That 5.9% is based on 2020 numbers. 2021 could see inflation go 18-20% at the extreme.
What good will that 5.9% "raise" get you ?
I would gladly go back with the low inflation pre-Covid. This past year I seem to be losing. Many of my costs are way above the CPI including groceries, gas, heating, utilities, prescription drugs. We like to have some decent steaks a few times a year. I passed them by last trip to the grocery store. Ribeyes were twice what I paid a few months ago.
There is another hidden cost that is starting make a big difference. Even if my income keeps up with the COL, each increase means more taxes and those additional taxes increase at a progressive rate.
I would gladly go back with the low inflation pre-Covid. This past year I seem to be losing. Many of my costs are way above the CPI including groceries, gas, heating, utilities, prescription drugs. We like to have some decent steaks a few times a year. I passed them by last trip to the grocery store. Ribeyes were twice what I paid a few months ago.
There is another hidden cost that is starting make a big difference. Even if my income keeps up with the COL, each increase means more taxes and those additional taxes increase at a progressive rate.
I agree with this. Most of our costs are above the CPI, due to a lot of expenditures outside the CPI list. Now, every time we go to a store, it's $300+ for our purchases. We're doing some building: rebar, $8 each, and we need 20. Double pole switch for a water heater: $20. It all adds up fast...
If the index exactly matched your specific spending, you would definitely be better off with no inflation because payments lag costs. Even if your cost go up less than the index, still most should do better with no/low inflation than high, you can substitute to bring down cost in high inflation, but can also do that in low/no inflation environment, just less incentive to do so - most should do better in low/no inflation.
Zero inflation is a down economy. That's not good news for retirees with stock-based retirement income.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
