It doesn’t take a genius to figure out that your retirement check (or Social Security, or ???) buys a little less each year. Supposedly, to keep your check from becoming worthless within a decade or so, the government has come up with a calculation of how much inflation was for a given year and then once a year adds that to your basic pay or allotment. This is called the Cost of Living Adjustment (COLA). Many companies also use this figure to adjust salaries or pensions. Over the last 10 years this increase has averaged just under 3% with 0% increases in two years.

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This increase is supposed to help the average (whatever that is) American at least maintain whatever his lifestyle (again, whatever that is) at the same level. Yea, that’s right! Me thinks maybe the government might be fudging just a bit to keep their skyrocketing cost down? Since 1978, the way the COLA is calculated has changed more than 20 times and most times, recipients received a little less money. More recently, they did a study (I love “federal” studies) that showed their old formula was paying out too much and from that time on lowered the COLA by chopping off 1% of any increase—imagine that.

Here’s my study:

  • Price of animal crackers is $3 per box—no the store acknowledges that price is joke and the “sale” price is only $1.50 a box. That’s 15 cents apiece for stale, tasteless crackers my grandkids won’t eat. I remember when these cost a quarter a box and in today’s world, that still seems about right price.
  • An oil change and service at a “specialty” garage is $30 plus the cost of oil. Additional charges for an oil filter that actually works. A service takes a worker less than 10 minutes to complete. Somehow I never get out of the place for less than $60. Through high school, college, military, and most of a 30-year career, I always budgeted $20 for a service and that included the oil (and they even washed the windshield).
  • Cereal that was $2.80 a box a few years ago is now closer to $4.50 a box. And get this, the box is the same size, but there is 20% less product. Using some math that is extremely difficult for me, I get a 50% increase in price during this short time span.
  • The same month I get my COLA increase, I also get the annual increase in the cost of my health insurance. Guess which one is more.
  • Steak has always been relatively expensive when compared to other meats. But have you seen the price of hot dogs lately? I guess when no one can afford a New York cut, cow lips, ears, bones, gristle, hooves, and eyeballs all shoot up in price.
  • I get notices monthly from Zillow that my house has gone down in value. I get an annual notice from the city that I will be paying more property taxes because my house is worth a lot more.
  • Razors for shaving were never a budget item—they are now.
  • Doctors who as recently as a few years ago were charging $50 for a ½ hour office visit, now charge $220 for 10 minutes of their (apparently precious) time.

I guarantee a COLA of 3% doesn’t begin to cover these costs. So yes, already in retirement, I resent not being able to do anything about my personal finances slowly slipping beneath the primordial ooze (love that word). But even more I resent the slight-of-hand routine the government has chose to “save” (not really save but more a rerouting of money into self-serving projects) itself money. And often this “saving” of 10 or 20 dollars a month is a near catastrophe to people who are trying to live on a $1000 a month or less Social Security payment.  What would you choose to give up congressmen—food—heat in the winter—medicine?

My solution—I’ve given up on solutions. I am convinced that I can’t get the government politicians to change anything that even remotely benefits them personally—having your money to spend is what keeps them in office and payoffs are their absolute top priority (in fact there are no longer any other priorities). If you question that, they just show you a study.

My answer to this problem is the same one I now have for all government problems—vote them out of office. I know this isn’t a good strategy. I know it will punish a few (nearly) honorable office holders. And I know, it doesn’t work (of the 90% of all politicians we hate, we re-elect over 90% of them). But right now it’s the only strategy I’ve got.

Pet Peeve: Cost of Living Adjustment

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