FREE NEWSLETTER
Go to main Forum page »
No doubt you have heard or read the posts and comments, perhaps by friends about the Social Security COLA.
It’s not accurate, not fair, not enough, doesn’t keep up with our actual spending, use the CPI-E and all the rest.
One thing it does for sure is add to the Trusts growing shortfall.
Some people really need that annual boost, if for nothing else to help offset growing Medicare premiums. But others, including many in the HD community, should be able to plan on their own to deal with inflation in retirement. It is built into projections and spreadsheets, right? We should have a backup plan.
What would you think about modifying the application of the COLA for higher income retirees? For example, no COLA for five years if you retire with the maximum FRA SS benefit or limit the COLA for the top 50% of retirees income wise to the dollar amount received at the mid point or maybe at a certain income level a COLA adjustment every other year?
We need a long term fix to Social Security and in my opinion the full burden should not be on today’s workers alone.
So, what do you say, can you handle the affects of inflation in retirement on your own?
I have read about various ideas to help fix the looming crisis. I suspect the fix will come at the eleventh hour, and be crafted to minimize the number of voters unhappy with the changes.
I do think the topic of inflation is important, and I recently came across an excellent and readable article by Bill Bernstein and Prof. McQuarrie titled “The Money Illusion-A User’s Manual”.
Go to: http://www.muckrack.com/william-bernstein/articles
Someone mentioned this site on HD before, and I apologize for not remembering who you are, but I’m grateful that you did! Several earlier articles are listed and they are also worth a read.
I am not sure if we would fall into the groups you mentioned or not? We have only been taking SS for around 18 mos, so only 1 COLA so far. It did help us with the Medicare premium going up. SS and 2 very small pensions are our base income, and we have been able to live on them for the most part. The 401k, now IRA funds we are using for extras and to save for big things. We are saving for a replacement car and recently replaced our 20 y/o refrigerator before it failed. And travel, both to our families and some fun things. So I think if our COLA was modified we would be ok for awhile, but we also were responsible and saved and did without things like fun traveling like I wanted to before retirement. Chris
Dick, I applaud your proposal or some variation thereof. COLA seems like a logical first place to start nibbling away at benefits for those who can absorb it.
I’ll even go further: provide an “ opt out” lump sum payment ( or a few staggered payments) similar to what corporations do when freezing pensions for those who could qualify.
I’m dragging my feet until 70 to even contemplate collecting S.S. I hope by then the benefit is reduced in a logical way perhaps as you propose – for starters at least.
Add a reasonably fair way to opt out for those who are already retired, secure and at least in my case, loathe the whole idea of receiving money monthly from the government especially when knowing the government can’t afford it…. that will be real progress.
The change you propose here would not affect me at my income level. I think that your idea could be one of several changes to rescue SS.
Considering that the payroll tax never increased during the final 30 years of my working life, I could justify having to pay tax on more of my benefit. We should not expect today’s workers to shoulder the entire burden, though they have to be some part of the solution as well.
It seems that Congress is beginning to take this seriously, still, I’m pretty ticked off that it’s taken this long.
Dan: I am interested in your comment about “Congress is beginning to take the issue seriously”. I have seen absolutely nothing from the 5 senators and representatives who are to represent me in Congress. Further, I have seen nothing in the print or televised news that leads me to believe anything is being done. What are you seeing/hearing/reading to indicate this issue is being addressed? Thanks.