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The Social Security cost of living adjustment (COLA) is tied to an old inflation index
Our President & CEO, Max Richtman, told NPR’s Scott Horsely on “All Things Considered” that the current formula for calculating Social Security COLAs — the CPI-W — is flawed. If Social Security used the Consumer Price Index for the Elderly, the 2024 COLA would have been at least 4% rather than 3.2%. For example, the CPI-W index overweights transportation costs, even though most retirees don’t drive as much as people who are commuting to work or taking kids to school. And at the same time, it underweights medical costs, even though that’s a major out-of-pocket expense for a lot of seniors.
Washington Post Puts Alarmist Spin on Social Security Projections
“In its reporting on the latest Social Security Trustees projections (Social Security and Medicare finances look grim as overall debt piles up, 5/6/24), the Post put a decidedly pessimistic spin on the facts. Contrary to the alarmist headline, the Trustees project that the programs’ trust funds will remain solvent longer than previously estimated,” writes NCPSSM President Max Richtman in a letter to the editor of the Washington Post. “Unmentioned in the Post article, Democratic lawmakers have introduced bills to keep the trust fund solvent by requiring the wealthy to contribute their fair share in payroll taxes.” Read more.
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