{"id":401017,"date":"2022-01-29T21:15:00","date_gmt":"2022-01-29T18:15:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/encore-retirees-in-the-u-s-do-not-live-on-fixed-incomes\/"},"modified":"2022-01-29T21:15:00","modified_gmt":"2022-01-29T18:15:00","slug":"encore-retirees-in-the-u-s-do-not-live-on-fixed-incomes","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/encore-retirees-in-the-u-s-do-not-live-on-fixed-incomes\/","title":{"rendered":"#Encore: Retirees in the U.S. do not live on \u2018fixed incomes\u2019"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a28cd9dbeca6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a28cd9dbeca6\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/encore-retirees-in-the-u-s-do-not-live-on-fixed-incomes\/#Social_Securitys_COLA_keeps_the_bulk_of_retirement_income_up_to_date_with_inflation\" >Social Security\u2019s COLA keeps the bulk of retirement income up to date with inflation<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/encore-retirees-in-the-u-s-do-not-live-on-fixed-incomes\/#Alicia_H_Munnell\" >Alicia H. Munnell<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Encore: Retirees in the U.S. do not live on \u2018fixed incomes\u2019<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Social_Securitys_COLA_keeps_the_bulk_of_retirement_income_up_to_date_with_inflation\"><\/span>\n  Social Security\u2019s COLA keeps the bulk of retirement income up to date with inflation<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000567632\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000567632\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       As inflation has gained traction in the last year, commentators constantly remark about how it is particularly hard on retirees who live on a \u201cfixed income.\u201d\u00a0 <\/p>\n<p> Please stop. Retirees do not live on fixed incomes. The 60% of households in the lower portion of the income distribution receive the bulk of their retirement income from <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security (see Table 1). Social Security adjusts benefits each year to reflect changes in the Consumer Price Index.<\/p>\n<div class=\"paywall\">\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:35.57142857142857%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-472891?width=540&amp;size=2.807017543859649 540w, https:\/\/images.mktw.net\/im-472891?width=620&amp;size=2.807017543859649 620w, https:\/\/images.mktw.net\/im-472891?width=639&amp;size=2.807017543859649 639w, https:\/\/images.mktw.net\/im-472891?width=700&amp;size=2.807017543859649 700w, https:\/\/images.mktw.net\/im-472891?width=700&amp;size=2.807017543859649&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-472891?width=700&amp;size=2.807017543859649&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-472891?width=700&amp;size=2.807017543859649&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-472891?width=700&amp;height=249\" alt=\"\" title=\"\">\n      <\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n      <\/figcaption><\/figure>\n<\/p><\/div>\n<p>       The automatic increase in monthly benefits in response to inflation is a wonderful aspect of the Social Security program. It ensures that retirees do not lose purchasing power as inflation rises. The most recent adjustment increased monthly benefits by 5.9%. Since the cost-of-living adjustment (COLA) first affects benefits paid after Jan. 1, Social Security needs to have figures available before the end of the year, and thus uses inflation numbers from the third quarter of the preceding two years to calculate the adjustment. That is, the adjustment for Jan. 1, 2022 is based on the increase in the CPI from the third quarter of 2020 to the third quarter of 2021. \u00a0<\/p>\n<p><strong>Read:<\/strong> 5 questions to ask yourself if you\u2019re aging alone<\/p>\n<p>I guess one could complain that the 2022 COLA is only 5.9%, when the CPI-W \u2014 the index used for adjusting Social Security benefits \u2014 increased by 7.8% year over year in December. But once inflation stabilizes, the COLA will keep pace with rising prices, and once inflation starts to decline, the lag in the adjustment will keep the COLA higher than the inflation rate. In short, over an entire inflation episode, Social Security COLA increases will fully compensate for inflation.\u00a0\u00a0\u00a0\u00a0<\/p>\n<p><strong>Read:<\/strong> Should I claim Social Security at 70, or claim it earlier and invest the money?<\/p>\n<p>Ah. Some might say, wouldn\u2019t it be better to use a price index that more accurately measures the spending pattern of retirees? Indeed, older people do spend more on healthcare than their younger counterparts. But the difference in the inflation rates between the two indexes <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/crr.bc.edu\/briefs\/what-is-the-right-price-index-for-the-social-security-cola\/\" class=\"icon none\">is small and has declined over time<\/a>. Indeed, the CPI-E \u2014 the index for the \u201celderly\u201d \u2014 is currently rising less rapidly than the CPI-W (see Figure 2).<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:64.28571428571429%;\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-472892?width=540&amp;size=1.5552855407047388 540w, https:\/\/images.mktw.net\/im-472892?width=620&amp;size=1.5552855407047388 620w, https:\/\/images.mktw.net\/im-472892?width=639&amp;size=1.5552855407047388 639w, https:\/\/images.mktw.net\/im-472892?width=700&amp;size=1.5552855407047388 700w, https:\/\/images.mktw.net\/im-472892?width=700&amp;size=1.5552855407047388&amp;pixel_ratio=1.5 1050w, https:\/\/images.mktw.net\/im-472892?width=700&amp;size=1.5552855407047388&amp;pixel_ratio=2 1400w, https:\/\/images.mktw.net\/im-472892?width=700&amp;size=1.5552855407047388&amp;pixel_ratio=3 2100w\" sizes=\"(max-width: 639px) 100vw, (max-width: 979px) 620px, (max-width: 1299px) 540px, 700px\" src=\"https:\/\/images.mktw.net\/im-472892?width=700&amp;height=450\" alt=\"\" title=\"\">\n      <\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n      <\/figcaption><\/figure>\n<\/p><\/div>\n<p>       The bottom line is that retirees in the United States do not live on a \u201cfixed income.\u201d For most households, Social Security benefits are their main source of retirement income, and these benefits are adjusted annually for changes in the cost of living. And the annual adjustments do a really good job of offsetting the effects of inflation.\u00a0<\/p>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetDynamic\n            inline\n    scope-web|mobileapps\n  article__inset\n          article__inset--type-InsetDynamic\n            article__inset--inline\n  \"><\/p>\n<div class=\"dynamic-inset-container article__inset__dynamic\">\n<style>\n    .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"] {\n        height: 445px;\n        margin-bottom: 5px;\n    }\n    .at16units .bleed .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"] {\n        height: 445px;\n    }\n    body.at12units .bleed .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"] {\n        height: 445px;\n    }\n    body .inline .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"],\n    body .offset .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"],\n    body .header .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"],\n    body.at8units .bleed .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"] {\n        height: 445px;\n    }\n    body.at4units .inline .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"],\n    body.at4units .offset .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"],\n    body.at4units .header .wsj-interactive.generic-iframe-embed[name=\"myiFrame\"] {\n        height: 445px;\n    }\n<\/style>\n<p><iframe class=\"wsj-interactive generic-iframe-embed\" name=\"myiFrame\" width=\"100%\" scrolling=\"no\" frameborder=\"no\" src=\"https:\/\/www.newretirement.com\/retirement\/carousel-5-tiles\/\"><\/iframe><\/p>\n<div class=\"wsj-article-caption\" itemprop=\"caption\">\n<\/div><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Alicia H. Munnell\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/author\/alicia-h-munnell\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:contributors@marketwatch.com\",\"text\":\"contributors@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Alicia_H_Munnell\"><\/span>Alicia H. Munnell<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-78A9-507BE1C5EFA8%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;#Encore: Retirees in the U.S. do not live on \u2018fixed incomes\u2019&#8221; Social Security\u2019s COLA keeps the bulk of retirement income up to date with inflation As inflation has gained traction in the last year, commentators constantly remark about how it is particularly hard on retirees who live on a \u201cfixed income.\u201d\u00a0 Please stop. Retirees do&#8230;<\/p>\n","protected":false},"author":1,"featured_media":401018,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-472895\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-401017","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/401017","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=401017"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/401017\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/401018"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=401017"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=401017"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=401017"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}