The Social Security Administration has released information about increases in the benefits payable to recipients in 2008. Benefits will be adjusted for the cost of living by 2.3% beginning January 1, 2008.
"Retirees are going to feel a disconnect this year between the COLA increase and the reality of the inflation they face," said Mark Zandi, chief economist at Moody's Economy.com. "If this calculation were done in another three months, it would be measurably higher."
Advocates for the elderly said the small increase highlighted the need to revamp the cost-of-living adjustment to better reflect prices paid by retired people, including the money they spend on health care.
Does it really make a lot of sense to increase benefits even more than they are presently being increased considering the precarious state of the system's finances? Congress might decide change the COLI calculation for seniors in order to buy some more votes next year but that would be imprudent.
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