Nevin's Data "Points"

Over the past couple of years, one of the most-clicked posts on NAPA-Net has been on a topic that is a bit of a head-scratcher. I’m speaking, of course, of the (now-incessantly tracked), monthly projections of the (potential) cost of living adjustment (COLA) for Social Security. It started back when inflation emerged as a real consumer concern—and it was spurred by the efforts of a group called the Senior Citizens League in publishing—EVERY MONTH—a projected cost of living adjustment (COLA) for Social Security. [i] And our coverage of those projections has been, and continues to be, one of the most clicked-on stories [ii] (ditto other publications, apparently).   Like many, perhaps most, of you, I was initially intrigued by the reporting. Let’s face it, after a couple of decades of relative economic slumber, inflation has reared its ugly head in a way that reminds some of us of the days of our youth when inflation was an actual scary economic reality, rather tha...

In recent days—notably at the State of the Union address—Social Security is back in the headlines. Granted, its invocation seems largely intended as a political dividing rod, but it seems today that the vast majority (and despite the veiled insinuations, perhaps the entirety) of Congress and the President are committed to that system’s preservation, or at least rebutting its diminution. It appears that touching Social Security remains the “third rail” of American politics. That said, it’s going to take more than bold podium pontifications to fulfill that commitment. It’s been called a Ponzi scheme by its critics—and, while not technically correct, there is a familiar element at work—the notion that money being deposited to the system now is basically going to be paid out to other beneficiaries. Indeed, in most Ponzi structures the scheme “runner” generally pays off longer-term participants with money invested by newer investors. Sooner or later, there are not enough new...

Last week the Treasury Department’s Social Security Board of Trustees released its annual report in a classic case of good news, bad news. The  good news , of a sort, was that the date through which Social Security will be able to pay scheduled benefits was projected to be 2034—and while that’s not very far away, it was a year later than the prior year’s report had indicated. The  bad news , of course, is that without some kind of adjustment the program won’t be able to pay those scheduled benefits beyond 2034. [i] Now, that’s not the same as “going broke” or running out of money—but, as things stand now—assuming no adjustment is made—a possible outcome would be that the scheduled benefits paid would only be about three-fourths of “scheduled.” [ii] What’s weird is that it’s hard to find anybody who seems to think the problem  won’t  get fixed at some point—though the definitions of “fixed” vary—and  nobody  is willing to hazard a guess on who’s...

There have been many different solutions put forth over the years to remedy the nation’s retirement ills, but regardless of your perception of the coming crisis (including those who believe such notions are overblown), there is a constant in every estimation of our retirement future.[1] Yes, I’m talking about Social Security. Indeed, we rely on the inevitability of those benefits with a certainty generally accorded only to death and taxes (both of which play a significant role in Social Security eligibility and claiming, as it turns out). And yet, for all its centrality in planning, Social Security faces its own funding crisis, or is projected to, according to the trustees of the program, in a report formally titled, “The 2019 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. ” That the program will run short of funds is no secret, with the only variable being at what exact poi...