C O L up 2.5%

[dewilson58]

More than 72.5 million beneficiaries will see a 2.5% increase to their Social Security and Supplemental Security Income benefits in 2025, the Social Security Administration announced on Thursday.

[Pugchief]

More than 72.5 million beneficiaries will see a 2.5% increase to their Social Security and Supplemental Security Income benefits in 2025, the Social Security Administration announced on Thursday.

Great news for the deficit as it won't spiral out of control quite as fast.

Not good news for the SS recipients who have to live with expenses that increased much more than 2.5%. Of course, if you don't buy food, health care or gasoline, YMMV.

[Bill14564]

Great news for the deficit as it won't spiral out of control quite as fast.

Not good news for the SS recipients who have to live with expenses that increased much more than 2.5%. Of course, if you don't buy food, health care or gasoline, YMMV.

Unadjusted 12 month CPI ending in September 2024 (https://www.bls.gov/news.release/cpi.nr0.htm)
All items: 2.4%
Food: 2.3%
Medical care commodities: 1.6%
Medical care services: 3.6%
Gasoline: -15.3%

Going to the doctor increased 50% more, everything else was less with gasoline actually decreasing.

[justjim]

Yeah, 2.5% is just like getting a slap in the face. However, good for the deficit. Don’t expect any relieve for the way S.S. COLA is figured.

[tophcfa]

Unadjusted 12 month CPI ending in September 2024 (https://www.bls.gov/news.release/cpi.nr0.htm)
All items: 2.4%
Food: 2.3%
Medical care commodities: 1.6%
Medical care services: 3.6%
Gasoline: -15.3%

Going to the doctor increased 50% more, everything else was less with gasoline actually decreasing.

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

[Pugchief]

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

You can either believe the stats they provide or your lyin' eyes....

[Bill14564]

You can either believe the stats they provide or your lyin' eyes....

I believe my accounting for Jan thru Sep of 2023 and 2024. 2.5% for all food is in the neighborhood.

[Stu from NYC]

You can either believe the stats they provide or your lyin' eyes....

They can say whatever they want, but for the items we buy regularly think 10% is closer to the truth.

[Altavia]

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

Another point of view.

marketwatch.com (https://www.marketwatch.com/amp/story/groceries-are-more-affordable-now-than-in-2019-so-why-are-people-still-so-mad-about-prices-74b5a6db)


Groceries are more affordable now than in 2019. So why are people still so mad about prices?

By Hannah Erin Lang
For the average worker, grocery prices are about as affordable as they were pre-pandemic.

[Pugchief]

When a joke becomes reality:

https://www.youtube.com/watch?v=KV488-rQ30s
Clip is a minute and a half, very funny throwback to the 80's

[Mleeja]

Unadjusted 12 month CPI ending in September 2024 (https://www.bls.gov/news.release/cpi.nr0.htm)
All items: 2.4%
Food: 2.3%
Medical care commodities: 1.6%
Medical care services: 3.6%
Gasoline: -15.3%

Going to the doctor increased 50% more, everything else was less with gasoline actually decreasing.

You can supply all the stats you want. However, I know just my Medicare supplement and Part D drug plan have increased more than 3.6% for next year. These two items alone far surpass any increase received from SSI.

[kkingston57]

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

Take out price of eggs and 2.3% is probably good. Before we know it restaurants will have MP ss their price for a 3 egg omelet

[GoRedSox!]

The CEO's of both Costco and Walmart talked at length this year about how they have been able to hold the line on prices. Although Costco did hike their membership fee $5.

With this COLA, the cost of living increases which are compounded on top of one another (just like the inflation rate is) over the past four years are: 5.9%, 8.7%, 3.2% and 2.5%. The average is about 5.1% per year.

I personally don't think it's that far off based on my own expenditures. However, I didn't have to pay higher interest rates on a mortgage, or high credit card rates, higher rent, and I didn't buy a car since 2017...so there are some expensive markets I am just not in. I don't think that that anyone is cooking the books, though.

[Aces4]

The CEO's of both Costco and Walmart talked at length this year about how they have been able to hold the line on prices. Although Costco did hike their membership fee $5.

With this COLA, the cost of living increases which are compounded on top of one another (just like the inflation rate is) over the past four years are: 5.9%, 8.7%, 3.2% and 2.5%. The average is about 5.1% per year.

I personally don't think it's that far off based on my own expenditures. However, I didn't have to pay higher interest rates on a mortgage, or high credit card rates, higher rent, and I didn't buy a car since 2017...so there are some expensive markets I am just not in. I don't think that that anyone is cooking the books, though.

The COLA markers don't mean much in this economy. It's very difficult for so many of the elderly to make ends meet.

[tophcfa]

Another point of view.

marketwatch.com (https://www.marketwatch.com/amp/story/groceries-are-more-affordable-now-than-in-2019-so-why-are-people-still-so-mad-about-prices-74b5a6db)


Groceries are more affordable now than in 2019. So why are people still so mad about prices?

By Hannah Erin Lang
For the average worker, grocery prices are about as affordable as they were pre-pandemic.

The key assumption in the article is that they are adjusting grocery affordability based on wage increases. That doesn’t mean squat for seniors living on a fixed income.

[Bill14564]

The key assumption in the article is that they are adjusting grocery affordability based on wage increases. That doesn’t mean squat for seniors living on a fixed income.

Isn't it odd to call it a "fixed income" in a thread about that "fixed" income receiving an increase next year?

[fdpaq0580]

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

Probably has to do with where you live, where you shop, what you buy, etc.

[Aces4]

Isn't it odd to call it a "fixed income" in a thread about that "fixed" income receiving an increase next year?

Not at all odd, the extra tidbit isn't close to covering all the price increases. The SS incomes are fixed to income numbers prior to the retirement date. If one has been retired 20-30 years, there is a large gap between older seniors and new retirees wage basis for SS. The small fluff added to low SS income doesn't cover squat.:sigh:

[tophcfa]

No worries, inflation is going down. Let’s look at a simplified example of how we are being manipulated into believing that.

Last year something that cost $5 dollars went up to $6, or it went up a dollar. That’s a 20% increase (1/5).
This year it went up another dollar, to $7. But wait, that’s only a 16.67% increase (1/6).
So both of the last two years the item went up a dollar each year, but the great news is that inflation is down 3.33% (20-16.67).

[Mrfriendly]

More than 72.5 million beneficiaries will see a 2.5% increase to their Social Security and Supplemental Security Income benefits in 2025, the Social Security Administration announced on Thursday.

Still holding off taking Social Security but nice to know it will be a little more each month.

[biker1]

I don’t know about the increase in my Medicare Supplement Plan yet as the premium increases occur in July and not January. I do know my Part D Drug Plan will stay at $0 per month. Depending on your Part D Drug Plan and the prescriptions you are taking, changes in Part D could wind up saving you money in 2025. However, the Medicare Part B premium will probably be rising by about 6% or about $10 per month.

You can supply all the stats you want. However, I know just my Medicare supplement and Part D drug plan have increased more than 3.6% for next year. These two items alone far surpass any increase received from SSI.

[klohmann]

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

Just to let folks know if they already don't:
COLA for SS is computed using the average of the last three months in a fiscal year:
July, August, and September and the same period from the year
before.
The formula used is:
PY = previous year
CY = current year
((CY-PY)/PY*100)/100

BTW July-September has also been noted as being the months that for some reason is generally a period where inflation slows and picked, according to the government as allowing enough time to compute and adjust payments for the COLA.

[MandoMan]

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

Remember, this is from September 2023 to September 2024, and it is an increase on what you already consider huge price increases. A lot of the increase happened more than a year ago. This is building on top of that. It is NOT a measure of how much the price of food has goon up since 2020. You got a much larger Cost of Living Adjustment last year because inflation was much higher, and you continue to get that. It’s not a one time thing.

The purpose of the Social Security COLA is not to raise it more than it’s gone up in the last year and give you a raise, but simply to help you keep up.

What’s more, the grocery inflation percentage is based on the average price of many things, some of which didn’t go up at all and some of which you never buy. I know some things I buy pretty often seem to have gone up 25% recently, but lots of things are the same as a year ago.

The Consumer Price Index also factors in prices that have gone DOWN. Gas is down about 15%. A lot of people are so used to watching TV news that tells them that the prices of everything have gone up so much that they don’t realize that this is not necessarily accurate or comprehensive. Here are the actual percentages for this year and last year from the Bureau of Labor Statistics, used for figuring out your COLA:
Access Denied (https://www.bls.gov/news.release/cpi.t01.htm)

This explanation is two years old, but still helpful:
What’s inside the consumer price index? | Pew Research Center (https://www.pewresearch.org/short-reads/2022/01/24/as-inflation-soars-a-look-at-whats-inside-the-consumer-price-index/)
“ The Bureau of Labor Statistics (BLS), which is responsible for the CPI, starts by collecting price data for hundreds of discrete goods and services – the so-called “market basket” – from around 8,000 housing units and 23,000 retailers, service providers and online outlets in 75 urban areas around the country. Data on rents is gathered from some 50,000 landlords and tenants.”

[Bill14564]

Not at all odd, the extra tidbit isn't close to covering all the price increases. The SS incomes are fixed to income numbers prior to the retirement date. If one has been retired 20-30 years, there is a large gap between older seniors and new retirees wage basis for SS. The small fluff added to low SS income doesn't cover squat.:sigh:

Actually, if you look over the past 10 years (because I got tired of typing numbers) the Social Security COLA numbers track the September inflation numbers very closely. 2016 was an anomaly where inflation was 1.5% but the COLA was only 0.3%.

If you add the numbers for the 10 years you get 30.8% for inflation and 30.0% for COLA. A loss of 0.8% over that time but that doesn't seem like much. The rates are actually compounded from year to the next but I haven't taken the time to figure out the equation for that.

As for SS payments to someone who retired 20 years ago and someone who retires today, there is more work to determine what that gap may be but my guess is it has to do with wages increasing faster than inflation. If wage increases have outpaced inflation then initial SS payments will have outpaced inflation as well. The SSA maintains a chart for average wage increase by year (https://www.ssa.gov/oact/cola/awidevelop.html). It shows that wages have increase a cumulative 43.45% over the past nine years (2024 data isn't available yet), much greater than inflation.

So if the starting SS is roughly tied to ending wages and the SS COLA generally keeps pace with inflation but wages increase faster than inflation then the starting SS for someone today will be more than the COLA-adjusted starting SS for 20 years ago.

Does it *feel* like wages are keeping up with inflation? Probably not. Do people's feelings generally track with reality? No. But think about how much "stuff" we absolutely need and can afford today compared to what we had when we were growing up. My family had one television and a record player. Vacations were camping in a tent and later a pop-up trailer. I spent most of my summer riding my bicycle or running around with friends. Today, multiple flat-screen smart TVs with a sound system are essential. We pick which country we are going to fly to for vacation and make hotel reservations (or splurge on Disney). It is nearly impossible to get kids off their devices (phones, tablets, gaming consoles) to get them outside. My parents didn't amass a huge bank account with the money they saved by NOT buying the things kids have today while today's parents are usually able to save a little even after buying all of today's "necessities." How can that be if wages have not increased faster than inflation and are now able to buy more?

Note: Not an economist, just someone who can google data, add numbers, and remember what constituted a good standard of living a few decades ago.

[Caymus]

Not sure how those stats are calculated, but does anyone in their right mind actually believe food went up only 2.3% in the last year?

Some of it depends on where and what you eat. Restaurant food inflation went up about 4 times in home food. That happened even though they mostly buy at lower wholesale prices. Meat, fish and eggs went up more than most other foods.

[Wilson02852]

The estimated average monthly Social Security benefit payable in January 2025 will now be $1,976 after the 2.5% COLA, up from $1,927 for 2024. That's a whooping $588.00 a year, $49.00 a month or roughly $12.00 a week. Don't spend it all in one place. My electric bill went up more than that.

[Bay Kid]

They have created "Funny Money"

[FredMitchell]

Isn't it odd to call it a "fixed income" in a thread about that "fixed" income receiving an increase next year?

I agree that it is odd. What about your income is "fixed"? It is a silly misnomer. It probably also inhibits intelligent investing. If your income truly is fixed, you should get a financial adviser to change your investment portfolio.

Interest rates are not fixed. They change daily. The return on long term securities is not fixed. Unless it is zero coupon, the bulk of the return comes from reinvestment income. Unless you are near death, some of your savings should still be in equities, including indexes based on non-US companies.

[Boffin]

Been going broke saving money for years.

[Andyb]

More than 72.5 million beneficiaries will see a 2.5% increase to their Social Security and Supplemental Security Income benefits in 2025, the Social Security Administration announced on Thursday.
Well, we are still behind by about 18% from the inflation debacle. It’s almost a slap in the face.

[Bill14564]

Well, we are still behind by about 18% from the inflation debacle. It’s almost a slap in the face.

Where did you see a 20% inflation number?

[CoachKandSportsguy]

The CPI has seasonal adjustments, which tries to smooth out the changes relative to the season, like a year over year change. However, CPI is both products and labor. .

Products may be slowing down, due to renormalization of the pandemic, but the services piece, which is labor and labor related, is not so low. Services piece is insurance, health care, owners equivalent rent similar and similar non product related prices. .

Services up 4.4% year over year, excluding owners equivalent rent, so for crappy data collection and estimation, call it 5.0%,
In May it was 5.0%

Consumer Price Index for All Urban Consumers: Services Less Rent of Shelter in U.S. City Average (CUSR0000SASL2RS) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/CUSR0000SASL2RS)

** of course excluding FL home insurance after two/three hurricanes in a season.

[Rich42]

There is no way that I believe those percent increases that people are quoting here or that the government is quoting here are anywhere near accurate. The government has to minimize the Social Security increase as a way of keeping the deficit down for next year. Additionally, those cost increases that are quoted don’t include the fact that virtually every container that every kind of food comes in is now smaller than it was before and there is less in it. In some cases up to 30 and 40% less food in the package. As usual, we seniors are getting screwed over by the government.

[Lottoguy]

Drop that plan and get a advantage plan. You'll be ahead of the game.

[KAM+6]

Well, we are still behind by about 18% from the inflation debacle. It’s almost a slap in the face.

"Slap in the face"?? Just when did the government say that you could live entirely on SS??
I had to work until I was 75 to live, modestly and frugaly, on SS and savings. Interest rates on CD plummeted to less than 1% previous administration. It is now around 5%. No mention of that in this thread!

[dewilson58]

"Slap in the face"?? Just when did the government say that you could live entirely on SS??


Missed that.

When did SS become 100%??

[bumpa]

You can supply all the stats you want. However, I know just my Medicare supplement and Part D drug plan have increased more than 3.6% for next year. These two items alone far surpass any increase received from SSI.

If you receive $3000 a month from SSI then you'll get $75 more per month. If your Supplement and drug plan cost you $300 a month then the 3.6% increase will cost you $10 more per month. A far cry from from surpassing the increase in SSI.

[bumpa]

There is no way that I believe those percent increases that people are quoting here or that the government is quoting here are anywhere near accurate. The government has to minimize the Social Security increase as a way of keeping the deficit down for next year. Additionally, those cost increases that are quoted don’t include the fact that virtually every container that every kind of food comes in is now smaller than it was before and there is less in it. In some cases up to 30 and 40% less food in the package. As usual, we seniors are getting screwed over by the government.

You think the government determines the size of food containers? You're looking in the wrong direction.

[bumpa]

There is no way that I believe those percent increases that people are quoting here or that the government is quoting here are anywhere near accurate. The government has to minimize the Social Security increase as a way of keeping the deficit down for next year. Additionally, those cost increases that are quoted don’t include the fact that virtually every container that every kind of food comes in is now smaller than it was before and there is less in it. In some cases up to 30 and 40% less food in the package. As usual, we seniors are getting screwed over by the government.

You think the government determines the size of food containers? You're looking in the wrong direction.

[Stu from NYC]

You think the government determines the size of food containers? You're looking in the wrong direction.

We also consider the size of the container when making food or any purchase.

Shrinkflation is real and getting worse

[Rich42]

You think the government determines the size of food containers? You're looking in the wrong direction.

I did not say one word about the govt determining product package sizes. Read more carefully!

[Pugchief]

Does it *feel* like wages are keeping up with inflation? Probably not. Do people's feelings generally track with reality? No. But think about how much "stuff" we absolutely need and can afford today compared to what we had when we were growing up. My family had one television and a record player. Vacations were camping in a tent and later a pop-up trailer. I spent most of my summer riding my bicycle or running around with friends. Today, multiple flat-screen smart TVs with a sound system are essential. We pick which country we are going to fly to for vacation and make hotel reservations (or splurge on Disney). It is nearly impossible to get kids off their devices (phones, tablets, gaming consoles) to get them outside. My parents didn't amass a huge bank account with the money they saved by NOT buying the things kids have today while today's parents are usually able to save a little even after buying all of today's "necessities." How can that be if wages have not increased faster than inflation and are now able to buy more?

Note: Not an economist, just someone who can google data, add numbers, and remember what constituted a good standard of living a few decades ago.

Awesome, you can now watch everything collapse on a 65" screen while you starve to death! /s

Technology, not wage growth has enabled this phenomenon. Big screen TVs are way cheaper than when they fist came out. So are computers. Big whoop. These are one-time purchases you make maybe every 5 years. Gotta buy food every week to survive, and those prices are on a rocket ship to the moon.

[Pugchief]

"Slap in the face"?? Just when did the government say that you could live entirely on SS??
I had to work until I was 75 to live, modestly and frugaly, on SS and savings. Interest rates on CD plummeted to less than 1% previous administration. It is now around 5%. No mention of that in this thread!

Because inflation was very low, which is a good thing. That's how short term interest rates work.

[Bill14564]

Awesome, you can now watch everything collapse on a 65" screen while you starve to death! /s

Technology, not wage growth has enabled this phenomenon. Big screen TVs are way cheaper than when they fist came out. So are computers. Big whoop. These are one-time purchases you make maybe every 5 years. Gotta buy food every week to survive, and those prices are on a rocket ship to the moon.


I don't have the data for this but I imagine standard (55"-65") flat screens cost about what a standard television did back when I was young. BUT, I now have two in my house and families with kids likely have three or four. AND, that is only the standard size - Amazon and Best Buy have no problem selling the 80"+ models at over $1,000 each.

Food prices seem to be about 2.2% higher over last year. A 2.5% COLA should cover that.

Yes, I am sure you can find items that have increased more. Eggs have peaks and valleys due to avian flu. Citrus prices depend on the weather. Avocados were expensive earlier but I don't remember why. Crab, lobster, and filet could be skyrocketing right now for all I know. But overall (at least according to the first five links in my search) food prices are up 2.2% on average. (I believe grocery prices were up less than restaurant prices but that wasn't as clear. If that is the case then it *could* be attributed more to labor costs than product costs)

[bumpa]

We also consider the size of the container when making food or any purchase.

Shrinkflation is real and getting worse

Agreed but it's not the government determining the size of the package

[bumpa]

Read the last sentence in your post

[Stu from NYC]

Agreed but it's not the government determining the size of the package

Never thought it did but companies reducing the size of the package is a major part of the inflation we are seeing.

[Stu from NYC]

Read the last sentence in your post

When you do not quote the post you are referring too how does anyone know what you are talking about?

[KAM+6]

Because inflation was very low, which is a good thing. That's how short term interest rates work.


Never in modern-day history was interest rates lowered to below 3%. Also, regulations eliminated so banks could whatever they want. Exactly what happened to Silicon Valley Bank last year. Just a repeat of 2008.

[dewilson58]

Never in modern-day history was interest rates lowered to below 3%. Also, regulations eliminated so banks could whatever they want. Exactly what happened to Silicon Valley Bank last year. Just a repeat of 2008.

Other than these Fed Disc Rates:

2.50% 3.00% 28-Jul-22
1.75% 2.25% 16-Jun-22
1.00% 1.50% 05-May-22
0.50% 1.00% 17-Mar-22
0.25% 0.75% 16-Mar-20
1.75% 2.25% 04-Mar-20
2.25% 2.75% 31-Oct-19
2.50% 3.00% 19-Sep-19
2.75% 3.25% 01-Aug-19
3.00% 3.50% 20-Dec-18
2.75% 3.25% 27-Sep-18
2.50% 3.00% 14-Jun-18
2.25% 2.75% 22-Mar-18
2.00% 2.50% 14-Dec-17
1.75% 2.25% 15-Jun-17
1.50% 2.00% 16-Mar-17
1.25% 1.75% 15-Dec-16
1.00% 1.50% 17-Dec-15
0.75% 1.25% 19-Feb-10
0.50% 1.00% 17-Dec-08
1.25% 1.75% 29-Oct-08
1.75% 2.25% 08-Oct-08
2.25% 2.75% 01-May-08
2.50% 3.00% 18-Mar-08


:ho:

[dewilson58]

"Slap in the face"?? Just when did the government say that you could live entirely on SS??


When was this????

:popcorn:

[Pugchief]

Food prices seem to be about 2.2% higher over last year.


Is that your personal experience (or your wife's if she does the grocery shopping)? In fact, does anyone on this board think food prices are reasonable?

I do the shopping for my household. We eat pretty much the same stuff from trip to trip with the exception of maybe what fruit is in season / on sale. I shop at the same store. And I can tell you that since 2019, my same pile of groceries is more than double what it used to be. Yes, the rate of increase has slowed, but food is very expensive on a relative basis.

[kkingston57]

There is no way that I believe those percent increases that people are quoting here or that the government is quoting here are anywhere near accurate. The government has to minimize the Social Security increase as a way of keeping the deficit down for next year. Additionally, those cost increases that are quoted don’t include the fact that virtually every container that every kind of food comes in is now smaller than it was before and there is less in it. In some cases up to 30 and 40% less food in the package. As usual, we seniors are getting screwed over by the government.

Agree with wat you said but how is government screwing seniors? We still are getting our SS check and Medicare is the best and cheapest health insurance that I have had in my adult life. Before I turned 65 my private health insurance was 11k a year with huge co pays and while employed I was paying 5K a year with a large deductible. Have a lifetime senior National Park Pass that cost me $50 for life. Income taxes are same.

[kkingston57]

Is that your personal experience (or your wife's if she does the grocery shopping)? In fact, does anyone on this board think food prices are reasonable?

I do the shopping for my household. We eat pretty much the same stuff from trip to trip with the exception of maybe what fruit is in season / on sale. I shop at the same store. And I can tell you that since 2019, my same pile of groceries is more than double what it used to be. Yes, the rate of increase has slowed, but food is very expensive on a relative basis.

A lot of beefs about food prices here. Basically we have two major grocers in Florida, Publix and Walmart. Not a monopoly but close. Can argue that we have Sams but who owns Sams(rhetorical). We spend about 1/2 of our food budget at Aldi. Not bad but choices are limited

[tophcfa]

A lot of beefs about food prices here. Basically we have two major grocers in Florida, Publix and Walmart. Not a monopoly but close. Can argue that we have Sams but who owns Sams(rhetorical). We spend about 1/2 of our food budget at Aldi. Not bad but choices are limited

We get the same stuff at Publix in the Villages as we get at Stop and Shop or The Big Y up north and the grocery bill is almost identical. Some things are a little more and others are a little less. The only good deals we get up north relative to the Villages is frozen goods from Trader Joe’s. We eat relatively healthy stuff, fresh fruits and veggies, yogurt, nuts and beans, multigrain bread, and lean protein (lots of fish) and our grocery bill has easily doubled in the last four years. I supposed if we bough food (if you want to call it that) with sugar and white flour then our grocery bill would be significantly lower (but the savings would catch up to us in health care expenses). Bottom line, healthy food has become very expensive.

[Aces4]

Actually, if you look over the past 10 years (because I got tired of typing numbers) the Social Security COLA numbers track the September inflation numbers very closely. 2016 was an anomaly where inflation was 1.5% but the COLA was only 0.3%.

If you add the numbers for the 10 years you get 30.8% for inflation and 30.0% for COLA. A loss of 0.8% over that time but that doesn't seem like much. The rates are actually compounded from year to the next but I haven't taken the time to figure out the equation for that.

As for SS payments to someone who retired 20 years ago and someone who retires today, there is more work to determine what that gap may be but my guess is it has to do with wages increasing faster than inflation. If wage increases have outpaced inflation then initial SS payments will have outpaced inflation as well. The SSA maintains a chart for average wage increase by year (https://www.ssa.gov/oact/cola/awidevelop.html). It shows that wages have increase a cumulative 43.45% over the past nine years (2024 data isn't available yet), much greater than inflation.

So if the starting SS is roughly tied to ending wages and the SS COLA generally keeps pace with inflation but wages increase faster than inflation then the starting SS for someone today will be more than the COLA-adjusted starting SS for 20 years ago.

Does it *feel* like wages are keeping up with inflation? Probably not. Do people's feelings generally track with reality? No. But think about how much "stuff" we absolutely need and can afford today compared to what we had when we were growing up. My family had one television and a record player. Vacations were camping in a tent and later a pop-up trailer. I spent most of my summer riding my bicycle or running around with friends. Today, multiple flat-screen smart TVs with a sound system are essential. We pick which country we are going to fly to for vacation and make hotel reservations (or splurge on Disney). It is nearly impossible to get kids off their devices (phones, tablets, gaming consoles) to get them outside. My parents didn't amass a huge bank account with the money they saved by NOT buying the things kids have today while today's parents are usually able to save a little even after buying all of today's "necessities." How can that be if wages have not increased faster than inflation and are now able to buy more?

Note: Not an economist, just someone who can google data, add numbers, and remember what constituted a good standard of living a few decades ago.

I know the story, one walked uphill twenty miles in three feet of snow each way to go to school daily also. Sigh.. it's a song and dance and many elderly people are having great difficulty in this economy and that tiny SS increase when considering the increase in the cost of insurance co-pays and prescription medication alone is putting many under great pressure.

We too are solvent but not so insensitive as to miss the struggle going on for many of the elderly. Maybe a nice tax on SS benefits for those receiving benefits over $40,000. a year would help.

[sianagers@att.net]

[QUOTE=Bill14564;2377785]Unadjusted 12 month CPI ending in September 2024 (https://www.bls.gov/news.release/cpi.nr0.htm)
All items: 2.4%
Food: 2.3%
Medical care commodities: 1.6%
Medical care services: 3.6%
Gasoline: -15.3%
If your doctor increases 50% might looks for another that’s a scam

[dewilson58]

Deflation items:

Access Denied (https://www.cnbc.com/2024/10/11/deflation-inflation-cpi-september-2024-in-one-chart.html)