Tag Archives: Consumer Price Index

Social Security Raise in 2018 is 2% NICE!

The Social Security Administration announced late last week the COLA (Cost of living adjustment) based not he CPI, Consumer Price Index (see graph below) would be a 2% increase.

Here is a great fact sheet link

Three Important Numbers

2% – The increase in ALL Social Security benefits for 2018

$128,700 – The phase out level of Social Security withholdings – Medicare 3% does not phase out anymore

$17,040 – The maximum amount of employment related income you can earn AND draw Social Security early without facing a dollar for dollar tax above this amount

The CPI – Consumer Price Index

The Consumer Price Index (CPI) (to be exact, it is the CPI-W for clerical workers and wage earners- it looks exactly the same) is the basic index living adjustments for Social Security (and many other instruments) are used.

img_0937

As you can see the line is generally up, but there are years that no adjustment is made!

Happy 2% raise next year!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

No Social Security/Pension Cost of Living Adjustment Increase for 2016

On October 15, 2015 the Social Security administration formally announced that there will be no Cost of Living Adjustment for 2016.

No Cost of Living Adjustment

The Cost of Living Adjustment (COLA) for Social Security and most other pension plans is based on the Consumer Price Index (CPI). Recall this is part of what Janet Yellen and her friends at the latest Federal Open Market Committee (FOMC) said was too low for their comfort and was used as one reason they did not increase rates.

 

CPI 1 year trailing 9-2015

 

Here is a good graph of the components of CPI, by Bonddad

 

CPI Components CO bonddad 2012

 

Believe it or not, the long term average of CPI is 2.75% – We are no where near that today !

Have a Great Day!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

Inflation? Not yet….Social Security Recipients to Receive only a 1.7% Raise

The Social Security Administration has announced the cost of living adjustments for 2013, and with all the talk of inflation, some may be surprised to find that the increase was only 1.7%.  Here is a nice summary page from the Social Security Administration.

Most pension and income inflation related adjustments are based on the Consumer Price Index (CPI) including those of the Social Security Administration. Here is an interesting summary from our friends at the Chartstore.com  and the Bureau of Labor Statistics.

Take a guess what two items have actually gone down in nominal price over the last two decades? And on that note, any idea which line item has increased the most over the last two decades?  See the chart for yourself, we find it interesting what areas are hot and what are not!

So there you have it, our clothes and washing machines cost us less today than twenty years ago, and for the most expensive item, filling up our tank. Good thing our cars drive farther and longer today than 20 years ago.

Have a Super Day!

JK

214-706-4300
http://www.jkfinancialinc.com
8222 Douglas Ave # 590
Dallas, TX 75225