Social Security COLA Increase

[OnMyWay]

Due to high inflation in the U.S., U.S. Social Security is projected to have a large COLA increase.  They will announce in October after the September CPI-W inflation number is released.  A lot of articles are project 8.7% increase.  I'm going with 8.8.  There are three boxes in the picture, showing the impact of 3 September numbers.  I'm going with 8.8 because CPI-W would have to drop a lot in September to come in with COLA at 8.7.

[Gator]

Regardless of the final number it will be a significant increase, but as always “a day late and a dollar short”. A few seniors I know here in the USA are also praying that the Medicare deduction won’t increase (there’s some discussion I’ve read that say it won’t) as that will negate the increase of the COLA. 

[JJReyes]

Does the increase in Social Security really reflect the increase of prices due to inflation? 

The Consumer Price Index by the Bureau of Labor Statistics has undergone numerous revisions.  Even the methodology changed from a Cost of Goods Index to a Cost of Living Index.   At one time, the price of a new television was included just as the cost of manufacturing was going down when the technology changed from cathode tube to flat screen.  Besides, how often do you replace the television? Another problem with CPI is their substitution bias when new items are added or changed to the basket of goods.  There is also the issue of quality.  We buy pump liquid soap.  The thickness recently changed because the manufacturers is adding more water to the formula.  Still, I am grateful for the increase because Social Security represents a portion of our retirement income.