Top news: Ukraine, The Monarchy or an 8.3% raise for 74 million Americans?

When it comes to what is considered news, we all have our own priorities. Example: The news from Ukraine is mostly good. For a change! And that is great!

From the U.K., the passing of the Queen Elizabeth II is sad.

Here at home, the partisan political divide is troubling to say the least.

But for individuals, the biggest news is nearly always personal. And financial. Like now!

For a huge chunk of the U.S. population, the big deal is that more than 73 million people will soon be getting their biggest catch-up with inflation increase in four decades. Most of them either get Social Security benefits, federal civil service retirement benefits or retired military pay. Some get (and earned) two or all of the benefits. The vast majority live in the U.S.A. But a large number are also residents of Panama, the Philippines, Mexico or other favorite non-U.S. retirement destinations.

Bottom line: This is a lot of money. For a lot of people. And they are going to need it as prices rise worldwide for just about everything.

Here’s the deal, the timeline and a history of previous increases:

With one month to go in the COLA (cost of living adjustment) countdown, federal, military and Social Security retirees are looking at a benefits increase in the neighborhood of 8.3%. Maybe more if inflation increases this month. The upside of the inflation catch-up is that it will help many people maintain their current standard of living. The bad news is that most desperately need it and that some of the lucky recipients — those retiring under the FERS retirement plan — also desperately need it. And because of the diet COLA feature, FERS retirees do not get full COLAs if the inflation rate exceeds 2%. Example: If living costs do go up 8% as many predict, Social Security, CSRS and military retirees will get the full amount. But FERS retirees would get 7%. That is still better than the deal for most private pension plan retirees, who will get nothing. But over an extended period of even modest inflation (exceeding 2%) it would eat into their buying power.

A COLA of that amount would outshine the 5.9% most of the retirees got in January of this year. The downside is that it reflects higher costs for just about everything, from food and gasoline, to entertainment and medical and prescription services. For the history of recent COLA for both CSRS and FERS retirees, here are the official numbers from the National Active and Retired Federal Employees:

Nearly Useless Factoid

By Daisy Thornton

The human nose can distinguish between 1 trillion different odors.

Source: CNN


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