In a piece of news pertinent to retirees and near-retirees this past week, the Social Security Administration announced its latest cost-of-living adjustment (COLA) increase for 2014.
Another Small Adjustment
The benefits increase was predictably small at just 1.5%. This change implies that the cost of consumer goods–as measured by official government data–only rose 1.5% this year. A quick look at the recent history of COLA changes illustrates why we expected a very small increase:
| 2009 | +0.0% |
| 2010 | +0.0% |
| 2011 | +3.6% |
| 2012 | +1.7% |
| 2013 | +1.5% |
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As you can see, the U.S. government has been very stingy with its adjustments as of late. I won’t get into how the inflation numbers are being massaged using so-called “chained CPI,” or how the government has a vested interest in keeping benefits low. What I will point out is a startling statistic published by the AARP recently:
“One-third (33.9 percent) of all [Social Security] beneficiaries—and nearly four in ten (38 percent) women beneficiaries–age 80 and older–rely on Social Security for nearly all of their family income (90 percent or more). That compares to only 19 percent of beneficiaries age 65 to 69.”
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