I can’t claim credit for this prediction, my tracking so far doesn’t get to 3%, but who knows, there is a long way to go and as we open the economy more and more a lot of pent up demand will be released.
Exclusive Social Security Benefits Forecast: COLA Likely to Jump to 3% in 2022
Source: Exclusive Social Security Benefits Forecast: COLA Likely to Jump to 3% in 2022 | Kiplinger
But keep in mind, nothing is free. A 3% COLA means higher inflation, like nearly double last year and that means higher prices.
Will Medicare premiums increase as well as it took most of my increase this year?
Last year the Trustees predicted the Part B premium to be $157.70 in 2022. But Congress kept premiums down artificially. Sooner or later there will be a catch-up.
“Inflation Expectations in the United States increased to 3.09 percent in February from 3.05 percent in January of 2021”. source: Federal Reserve Bank of New York
I believe that the CPI will be well above 2% (currently sitting at 1.7%) by the end of the year. Food is running at 3.6%, medical at 3%, overall energy is 2.4%. Some components of the energy figure are natural gas which is 6.7% and gasoline is at 6.4% for February. How will the supply and demand affect the gasoline prices as people start commuting again and traveling again? The government just dumped another $1.9 trillion into the economy which will add to the demand side without the available supply side of goods. I can verify that I still cannot buy some items from food to building supplies. There are local housing bubbles due to the covid-19 and people leaving big cities due to health and “peaceful protests” concerns which are making some housing markets overall prices out of whack.
Today and tomorrow the FOMC will meet. They had predicted that Fed interbank rate might stay at 0.25% until the end of 2022. We will see by the end of the week if they are worried about inflation.
3%+ cola will not help much, if the Medicare premium goes up $ 15 per month just to catchup and stay even with inflation, it means my wife and I will see just a $10 increase per month in our total SS benefit with a 3% cola. I just purchased NY strip steaks at Sam’s Club for $9.99 per pound, up from $7.99 per pound 6 months ago, that is a 25% increase. Gasoline’s average price just jumped another 9 cents in a week. By the time summer driving season arrives, we will be over $3 per gallon nation wide. I purchased gasoline for $1.94 on Feb 10th, Today it is $2.39, that is a 23% increase in just 5 weeks. I have traveled over 6,000 miles since Sept 2, 2020 and still have at least 2,200 miles to go to get back home sometime in April / May. Going to have to stay home until 2023, before another road trip at these prices, for everything.
FOMC update 3-17-21
Feds expect 2.4% inflation for 2021.
4.5% unemployment by the end of the year.
Keeping the interbank rate near zero percent until 2023.
It doesn’t make sense to me. In the past the Feds want 2% inflation with 4-4.5% unemployment. On my trip last week to Green Bay, WI, one restaurant could not hire help because people were making more money to stay home. So we are going to have 4.5% unemployment by the end of the year?
Interbank rate near zero percent with any kind of inflation will continue to hurt retirees as an unintended consequence.
The Banksters are making out like bandits, getting cheap money from the FED and loaning it out at 20% to 36%+ to people stupid enough to carry a balance on a credit card. They are even making plenty of money on Home and Auto loans, because the amounts borrowed are so much higher than they were 30 to 40 years ago. Yet I only earned 29 cents last month in interest on my $3,000 emergency fund savings account. The only thing I am doing that seems good is earning 3 to 5 % cash back using credit cards to purchase everything and paying statement balance each month. Cash back – the new savings account, lol. I just checked my credit score Equifax – 801, Transunion – 810.
Being a low income worker my entire life, never made more than $35,000 (1994) per year. Average income per year 1971 to 2006, $11,400. I quit working at age 50, living on a small USAF pension, needs of family were much more important than making a few extra bucks @ $8.50 per hour. I noticed that many of my peers that continued to work, even with pay raises, there standard of living was still going down every year. I have learned the best way to improve your standard of living, is do not have any credit card debt and only spend money on needs, wants are something I cannot afford. I purchased only used cars from 1986 until 2020, for cash. Now I have the income to be able to afford a new car lease.