Retirement Not Cheap
Joe Setaro, CORRE VP, provides this bit of cheery information.
You will recall that we have asked for 75% of the increase in the
cost of living (CPI-U) for our adjustment. There has always been an
assumption that the cost of living for seniors does not increase as
much as the population as a whole, since their kids are grown, houses
paid for, education complete, etc.
It seems that over the last several years (since 1982), the BLS has
been making a study of this. I don't know what triggered it, but
their document says that the government "policymakers have become
increasingly interested in issues facing older Americans."
The results were not what I expected. The cost of living for seniors
(called the Experimental CPI or CPI-E) is higher than either the
CPI-U or CPI-W (the CPI-W is used to calculate Social Security COLA).
This is due to a great extent to increased medical care for the
elderly. The report states that from Dec. 82 to Dec. 07, the CPI-E
rose 126.5% while the CPI-U rose 115.2% and the CPI-W rose only
110.0%. In other words, CORRE members are really worse off than we
thought.
You might want to check out the report. It is a six page report and
the overall summary is on the first page.
The report can be found at:
http://www.bls.gov/opub/mlr/2008/04/art2full.pdf
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