A recent article by Peter Diamond (Nobel Prize 2010) and Peter Orszag (a former director of the Office of Management and Budget in the Obama administration) once again raises the question of the best way to bring the Social Security system into long-term financial balance. This is an important issue for anyone who will depend [...]
Archive for March, 2012
More on the Social Security COLA Adjustment
Calculating the Social Security cost-of-living adjustment (COLA) with a 3-month snapshot of CPI change can generate COLAs that are unrepresentative of the actual rate of inflation for a year. For example, the 2008 COLA was 5.8%, based on the inflation in the 3rd quarter of 2008, relative to the 3rd quarter of 2007. In contrast [...]