Thread: What do you think will happen when...

Originally Posted by Navaja

They're already loosing the yearly cost of living adjustment.

But no, this is neither a Tax Increase nor a Benefits Reduction, it's only less pocket money for the retirees.

If I am not totally mistaken, the COLA is based on the difference of CPI-W between last year's 3rd trimester and this year's 3rd trimester. This year, the calculation results in a negative COLA but you can't decrease the benefits... ergo no increase this year. You'd have needed massive inflation before the end of September to get a COLA increase.

Yes, I know that the metric used for the calculation sucks as it doesn't represent the average shopping basket of a retiree. That works both ways, that means that for the last decade the retirees received living cost adjustments based on the price increase of goods they didn't buy.

How will it work for Americans abroad who have health insurance in the country the live in?

For the Americans abroad, it will be business as usual: taxation without representation and get the foreign benefits they pay for, ultimately depending on the foreign country.

Their pension status might depend of the agreements between the States and the country they live/work in or of the duration of their employment abroad.

Originally Posted by MichaelP

For the Americans abroad, it will be business as usual: taxation without representation and get the foreign benefits they pay for, ultimately depending on the foreign country.

Their pension status might depend of the agreements between the States and the country they live/work in or of the duration of their employment abroad.

I guess I should make my question more clear - will American citizens have to pay for a US-based health insurance when living abroad? (health insurance != tax)

Originally Posted by Navaja

People on Social Security will start contributing in 2010.

They're already loosing the yearly cost of living adjustment.

But no, this is neither a Tax Increase nor a Benefits Reduction, it's only less pocket money for the retirees.

Don't forget Cap and Trade. That's another "non-tax" decrease in disposable income...or any income period.

Originally Posted by MichaelP

If I am not totally mistaken, the COLA is based on the difference of CPI-W between last year's 3rd trimester and this year's 3rd trimester. This year, the calculation results in a negative COLA but you can't decrease the benefits... ergo no increase this year. You'd have needed massive inflation before the end of September to get a COLA increase.

Yes, I know that the metric used for the calculation sucks as it doesn't represent the average shopping basket of a retiree. That works both ways, that means that for the last decade the retirees received living cost adjustments based on the price increase of goods they didn't buy.

I'm not sure if this is the same thing, but the news reported that the cost of living increase was an automatic thing that has provided a raise to recipients of social security since the mid-1970's. I'm sure that there is a formula that is used to calculate the automatic kick-in like you say.

Originally Posted by MinniesMate

I'm not sure if this is the same thing, but the news reported that the cost of living increase was an automatic thing that has provided a raise to recipients of social security since the mid-1970's. I'm sure that there is a formula that is used to calculate the automatic kick-in like you say.

Yes, it is the same thing.

Originally, the government had to vote every SSI benefit increase. In 1973, they voted a law indexing the Cost Of Living Adjustment (COLA) on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W for short). That law took effect in 1975 and automatically increased the benefits with a percentage based on the difference of CPI-W between two years, the calculation is traditionally done at the end of the 3rd trimester. The CPI-W at the end of September 2009 was actually lower than at the end of September 2008, therefore negative index and no increase.