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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?
If no COLA, then there should be no increase in Part B/D Medicare surcharge. (10% last few years)
What has one to do with the other? Health care costs rise no matter what.
It appears the 2026 report from the Social Security trustees includes an “expected” inflation rate of 2.7% for 2026 and then 2.4% for subsequent years in the calculation of the depletion date of the retirement trust fund.
So my take is to worry about unexpected inflation which currently appears to me may be higher than the “intermediate” assumptions used by the trustees.
A balanced approach between current and future generations seems to be a reasonable approach. My understanding is FDR was deeply concerned that Social Security not be viewed as a traditional welfare plan to build long-term political durability to the program.
Yes he was, that’s why is supposed to be self funding and not part of the budget/political process. The current expected 2027 COLA is 3.1% but could change.