Coming Out Ahead – HumbleDollar

Mike Zaccardi | Oct 20, 2021, 3:19 am ET

LAST WEEK’S NEWS that Social Security recipients will receive a 5.9% cost-of-living adjustment for 2022 might seem like a nonevent. After all, those larger monthly checks will be fully devoured by today’s higher prices.

Or maybe not.

September’s report for the Consumer Price Index (CPI) showed that inflation for medical care services—a big cost for retirees—was quite tame over the past 12 months, rising less than 1%. Seniors also spend significantly less on transportation, so they’re less harmed by the past year’s 15% surge in the cost of new and used cars and trucks, as well as motor vehicle parts.

On the downside, younger retirees—or, at least, those willing to travel during the pandemic—have likely felt the brunt of the 18% jump in the cost of “lodging away from home.” One plus for travelers: A strong U.S. dollar has made overseas excursions less pricey. Those in their 60s usually travel more, while those ages 75 and up tend to spend a higher amount on health care.

Next year may be kinder to all consumers. According to Bank of America analysts, core CPI—which excludes volatile food and energy items—will rise 4.3% in 2021 and 3.1% in 2022. The Federal Reserve, which looks at a somewhat different inflation measure, expects core inflation to be even lower.

What does all this mean? Arguably, those receiving Social Security checks are getting a pretty good deal. They’re receiving a 5.9% raise, while their cost of living appears to be climbing at a slower rate.


Informative articles, short commentary and lively comments on all things related to money and life. HumbleDollar is a blog you really want to visit regularly. You will also find over 100 articles and blog posts by me. (But don’t let that scare you off😎).


  1. Your assumptions are incorrect. Retirees are still losing buying power each month and by the time of the COLA increase in JAN we will have lost buying power for the last 12 months and we will never get those loses back. My family SS benefit will go up $79 in JAN 2022, but I am currently spending $100 more per month on just the food price increases. Gasoline is $1,27 per gallon more, so it cost me $22.86 more per tank. We do not yet know how much Medicare premiums will increase, but even if it only goes up the projected $10 per month, it means My SS increase will be a net $69 or $948 per year @ $79. So, in just 2 spending categories, my costs are up $1,474 per year. – $948 = -$526 per year. Not such of a “good deal” if you ask me. Your ability to “SPIN” data is right up there with the elite political class.


      1. guest – I did not include the $10 Medicare premium increase in my calculations. I just mentioned the Medicare premium increase, because many believe it will go up more than $10, because Congress limited the increase in 2021. NO SPIN, I only used the Fuel and Food numbers in my calculations. I guess I should of commented about the Medicare premium increase in a separate paragraph.


    1. Your mileage may vary.

      Gasoline, specifically, is very volatile (prices, I mean)

      “The reasons for the price spike are textbook supply and demand from an economics textbook: Americans have gotten back to driving more this summer as the pandemic has moderated, and a combination of domestic supply interruptions and trouble in energy markets overseas have made crude oil more expensive. ”

      With all the changes, mostly due to Covid, this year’s inflation may be more of a fluke than a trend. We shouldn’t be surprised to see less, or even negative inflation next year.

      I for sure don’t track my expenses as closely as you. Budget? What budget? We don’t need no stinkin’ budget! (I learned that from Mr. Quinn.)

      The other thing I learned is not to decrease my annual investment contributions. Pay yourself first. I increased them. Since the last tax “reforms”, we have been getting larger refunds, so we reduced our withholding and moved the money to mutual funds.


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