The White House has recently announced that, like last year, there will be no cost-of-living adjustment for Social Security recipients. This may not seem too noteworthy, but if it continues it will be a catastrophe for seniors and those approaching their "golden" years. This will be particularly true for those workers who do not have, or will lose, their cost-of-living allowances.
I'll use myself as an example. I'm a fifty-year-old Metro bus driver. If I lose my COLA this year, as it appears I will, and I do not get it back before I retire, which is all but certain, the actual purchasing power of my paycheck will be reduced severely by the time I reach sixty-five. ( This is assuming that Social Security will exist then, which is by no means clear. )
Say we use a conservative estimate of two percent inflation annually. After five years my paycheck will have only about ninety percent of its present buying power. After ten, it will drop about eight more percentage points. By the time I retire, my paycheck will be worth only about seventy-four percent of its current value. Consequently, that first Social Security check will reflect this onerous depreciation. And if I live to the average age of seventy-three, and there continues to be no cost-of-living adjustment for Social Security recipients, the value of my income will continue to plummet. For some this will inevitably mean eating cat food, cutting medications in half, and even homelessness for less fortunate, even for those who worked all their lives.
And this is assuming a modest two percent rate of inflation. With the government borrowing money to bailout banks and thus creating trillions of new dollars, there has never been a greater chance of hyperinflation. I believe it is next to impossible for inflation to run at or under two percent over the next ten years.
If you do not have a COLA, get it. If you have one, don't lose it.