Two and a Half Inflation Myths

Inflation lately has been pretty tame. Still, the possibility that it could raise its ugly head again, eating away at our spending power and standard of living, is always in the back of our minds. That’s why it’s important to understand inflation to better protect ourselves from its potential impact. Knowing these myths about inflation is a good place to start. Myth one: Inflation is easy to predict. The U.S. Bureau of Labor Statistics (BLS) measures inflation and reports consumer …

Interest Rates Are Low Until You Do the Math

I often hear that interest rates are awful and that it’s the worst time ever for retirees needing to live on fixed income. Yet when you look at after-tax, inflation-adjusted returns, a different picture emerges. Many people smile when I tell them that back in 1980 they could have earned 12 percent on a 10-year U.S. Treasury or certificate of deposit (CD). Depositing $10,000 would have returned $1,200 a year. But if a third went to taxes, that gain would …

9 Things to Look for in the President’s Budget

The GOP-controlled House of Representatives approved a budget proposal first. Then came a very different document from the Democratic-controlled Senate. Now thousands more pages of numbers will land with a thud on Capitol Hill on April 10. It’s the president’s annual budget proposal. Unless you’re an underemployed CPA or an incurable policy wonk, you probably won’t want to wade through all that. So here’s a short checklist of what you should watch for in the budget: A chained CPI. This twist on …

Measly Social Security COLA Announced for 2013

You won’t be rolling in dough with next year’s Social Security cost-of-living adjustment at 1.7 percent – about $21 a month more for people collecting the average retirement benefit of $1,236. [See our full story on the COLA]. Some 56 million beneficiaries will see the increase in their payments beginning in January. It’s one of the lowest since Social Security COLAs were adopted in 1975. Not to add insult to injury, but that $21 is likely to be reduced by a …

Social Security Recipients Can Expect Tiny COLA

Social Security recipients, don’t get your hopes up. Next year’s cost-of-living adjustment will raise benefits by 1.5 percent to 1.7 percent starting in January, about half of this year’s 3.6 percent hike, according to an estimate from the American Institute for Economic Research. Economists at the AIER made their prediction less than two weeks before the Social Security Administration announces the official COLA on Oct. 16. The COLA won’t be enough to cover higher prices for food and other everyday purchases, …