A government “fix” is like “fixing” a cat — it’s never quite right afterwards.
Well, the bean-counters at the Social Security Administration decided it was time for a Cost-of-Living adjustment (COLA) for beneficiaries. There wasn’t one last year. No inflation, they said. So the great adjustment for this year is 0.3% — about $4 per month for the average recipient. That’s one extra Big Mac per month.
Meanwhile, the Social Security Wage Base will go up 7.34%, from $118,500 to $127,200. How does that work?
Simple — they just use different calculations. The benefits are increased by the inflation rate, and the wage base (when there is a COLA) is increased based on the Average Wage Index. Isn’t that cute?
Well, it turns out that the Wage Base has increased 35% over the last twelve years, but the Cost-of-Living Adjustment has only given beneficiaries a 22% increase.
Does the word BOHICA mean anything to you?