Already, we're getting projections of what the Cost Of Living Adjustment (COLA) will be for Social Security this year. It's clear it will be far higher than what we're used to. The Kiplinger Letter is predicting it will be 6.3%. I don't know that they should be but Social Security recipients always seem happy to see large COLAs even though their purchasing power hasn't really increased.
Jul 19, 2021
COLA Will Be High This Year
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Based on the figure for June, it is already running at 5.1% if the cost of living were to remain unchanged for the next three months. It will also be interesting to see what the new Medicare premiums will be.
Re: your last sentence in your article? When you watch prices go up, any increase in what is your pocket helps. I'd love for prices not to go up, but should I not be happy that even late, I get some sort of a catch-up for when they do? I mean, I should be unhappy to see a large COLA? Not sure what your point is.
Yeah, it seems that many Americans don't have a firm grasp on the concept that COLAs are not "raises." High COLAs mean the nation is experiencing high inflation. Low COLAs mean the nation is experiencing low inflation. No COLASs mean the nation is experiencing deflation.
COLA's work better in some areas than others (not necessarily during the pandemic though). A person in West Virginia gets the same COLA as someone in Hawaii. The cost of living varies WIDELY between the two states, where on a normal year, the cost of living may have not changed so much in WV, but skyrocketed in HI. With covid tho, I think it's going to be a little different this year. So, sometimes, yes....it is a raise, other times/places it's just barely enough to keep up.
I think the real point is that it does try to keep up. Imagine what it would be like if it were frozen.
7:02 pm -- I don't have to imagine. Attorney fees have been frozen at the same rate for over 10 years. (Meanwhile the assessment from SSA for paying us the fee is tied to inflation. Go figure.)
Biden is proposing a 2.7% salary increase for federal workers. 6.3% for non-workers is crazy. Workers bear the same costs for things like food, clothing, gas, etc. Remind me again which group is on a "fixed salary".
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