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Is it time to create a Consumer Price Index for seniors?
See bold, below.
quote:
Seniors and other retirees across America will get some lousy news on Thursday.
For the first time in five years, they will likely get no annual raise in their Social Security benefits in 2016.
The reason? A decline in inflation caused by falling gas prices.
The amount of money that Social Security pays out is adjusted each year to take into account the rate of inflation. This is known as the cost of living adjustment, or COLA.
The inflation measure used by the Social Security Administration was down 0.3% for the 12 months that ended in August -- largely due to a 23% drop in gas prices. Thursday's September reading is likely to show similar numbers. (The COLA is set every October based on the September inflation report.)
In 2015, Social Security benefits rose 1.7%, and they've climbed by less than 2% for three years in a row.
Money Essentials: How much to save for retirement
But if prices don't increase, Social Security benefits stay flat. That's what happened in 2010 and 2011. And it's likely to happen again in 2016.
"It's very likely the COLA will be zero, given the way the numbers are now," said Polina Vlasenko, senior research fellow at the American Institute for Economic Research.
The problem for seniors is that the way the government measures inflation simply doesn't reflect how people on Social Security spend.
Seniors don't benefit as much from lower gas prices as the average American worker because most are no longer driving to and from work. Medical costs have also increased faster than overall inflation, and a greater percentage of seniors' spending is on health care.
Most of today's seniors know how to adapt their spending to their circumstances, and can do so adequately provided that the changes are gradual. For example, few drive huge vehicles or live in houses costing too much to maintain. Providing free medical care to those in most need of it would give a boost to the ill ones without providing windfalls to the healthy, as a special indexation rate would do.
It will be another matter when the generations who never learned how to save reach retirement.
Originally posted by JS357For me, the difference between almost $4 per gallon gas, and the current price means more to me than the $20 increase I got in SS last year.
Is it time to create a Consumer Price Index for seniors?
See bold, below.
quote:
Seniors and other retirees across America will get some lousy news on Thursday.
For the first time in five years, they will likely get no annual raise in their Social Security benefits in 2016.
The reason? A decline in inflation caused by falling gas prices.
The ...[text shortened]... ter than overall inflation, and a greater percentage of seniors' spending is on health care.[/b]
Gasoline prices don't mean as much as they did when I was fuelling a delivery vehicle, but gas is still at or near the top of my manageable expenses. Any thing that costs more is not manageable.
On medical expenses, they exceed my gasoline expenditures, but I question whether that actually has to be. My Medicare advantage premium, along with regular medicare deduction is pretty high. It paid off year before last, when two surgeries maxed out at nearly a half million dollars. Thing is, that I'd have still got the surgeries with just Medicare, and the doctors and hospital would have swallowed the additional 20% not covered. What practical means would they have to collect? Recently, I've heard that those Medicare supplements may actually be responsible for the escalation of doctor and hospital costs for seniors.
Tell me where my reasoning is faulty.
My Medicare Advantage premium exceeds my gasoline purchases each month, but did not do so a year or two ago when gas prices were higher.
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Originally posted by normbenign"Tell me where my reasoning is faulty."
For me, the difference between almost $4 per gallon gas, and the current price means more to me than the $20 increase I got in SS last year.
Gasoline prices don't mean as much as they did when I was fuelling a delivery vehicle, but gas is still at or near the top of my manageable expenses. Any thing that costs more is not manageable.
On medical exp ...[text shortened]... gasoline purchases each month, but did not do so a year or two ago when gas prices were higher.
The reasoning doesn't apply to everyone. We all have our own personal Consumer Price Index although I doubt anyone tracks it. It's just that on the whole, gasoline is a smaller part of a retiree's budget than it is of the working population's, and medical care is a larger part. The generic CPI is unrealistic for seniors.
"Thing is, that I'd have still got the surgeries with just Medicare, and the doctors and hospital would have swallowed the additional 20% not covered. What practical means would they have to collect?"
Many of us, (including you, it seems) are not willing to stiff our healthcare system.
Originally posted by JS357True, some of us are compulsive payers.
"Tell me where my reasoning is faulty."
The reasoning doesn't apply to everyone. We all have our own personal Consumer Price Index although I doubt anyone tracks it. It's just that on the whole, gasoline is a smaller part of a retiree's budget than it is of the working population's, and medical care is a larger part. The generic CPI is unrealistic for senio ...[text shortened]... llect?"
Many of us, (including you, it seems) are not willing to stiff our healthcare system.
However, recognizing that even many younger people who need expensive treatments, have ways of getting these free, (Not really free, as someone pays) makes many wonder, especially in old age, if I am going to be treated anyway, why spend money on insurance that could be spent on entertainment, a better diet, whatever.
I know of a couple of senior SS recipients, brothers, who don't have Medicare deducted from their checks, so are totally uninsured. Will they not be treated in an emergency?
What I am beginning to believe is that regular Medicare paying 80% of the asking price of hospitals and doctors is plenty enough for them to operate on, and anything they get more than that is the whipped cream on the sundae. We know that insurance companies barter with health care providers and almost never pay the entire bill. Why should seniors not be at least as frugal in their payment process?
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Originally posted by normbenign"I know of a couple of senior SS recipients, brothers, who don't have Medicare deducted from their checks, so are totally uninsured. Will they not be treated in an emergency?"
True, some of us are compulsive payers.
However, recognizing that even many younger people who need expensive treatments, have ways of getting these free, (Not really free, as someone pays) makes many wonder, especially in old age, if I am going to be treated anyway, why spend money on insurance that could be spent on entertainment, a better diet, wh ...[text shortened]... ver pay the entire bill. Why should seniors not be at least as frugal in their payment process?
Do you think that they will be in as good condition and get as good treatment in the emergency room? Of course if that's all they want, Yes of course, we'll give them that. The government does not prohibit a total drop out from health care.
Originally posted by JS357Why should I? You are making an argument based on recent gas prices not matching inflation. If you don't actually know the answer to the question I asked then your argument is flawed as it is based on insufficient data.
Why don't you look for the information you want?
If workers are required to use gas to get to work, then why can't workers write their travel expenses off their income tax?
The people who make more money get to write travel expenses off, but lower wage workers can't. What a system we have that was created by both Democrats and Republicans.
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Originally posted by twhiteheadThe COLA is adjusted annually. Seniors don't drive as much as commuters. Their medical costs are higher. What's to dispute? edit: Some years the seniors get more, some years less, but it more accurately reflects their change in cost of living.
Why should I? You are making an argument based on recent gas prices not matching inflation. If you don't actually know the answer to the question I asked then your argument is flawed as it is based on insufficient data.
Originally posted by JS357Congress just authorized transferring funds from SS trust fund to Medicare which is in danger of insolvency some time next year. SS is also projected to be broke in less than two decades, sooner if the funds go to Medicare.
see my edit. Some years the seniors get more, some years less, but it more accurately reflects their change in cost of living.
This isn't a big worry for me, since the likelihood is that I'll be dead by then. This ought to be a concern for the next couple of generations who are paying the highest FICA taxes in history, but may live to see the system bankrupt.
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Originally posted by normbenignYes I am worried about the next generation. The nuclear multi-generation family residence is about to make a comeback.
Congress just authorized transferring funds from SS trust fund to Medicare which is in danger of insolvency some time next year. SS is also projected to be broke in less than two decades, sooner if the funds go to Medicare.
This isn't a big worry for me, since the likelihood is that I'll be dead by then. This ought to be a concern for the next couple ...[text shortened]... tions who are paying the highest FICA taxes in history, but may live to see the system bankrupt.