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Answers are provided by Robert S. Kaufman
Concern About No Cost-of-Living in 2010
(Posted December 24, 2009)
Question 740: How can the Railroad Retirement Board say the cost of living has not increased? Almost anything you can think of has increased, including the cost of milk, utilities, gas, taxes, food, medical insurance.
Answer: I can understand your disappointment that the automatic cost of living adjustment in many federal benefits, including Railroad Retirement, did not result in an increase this year. The formula used compares the average cost of many things between July-September of this year with the cost of those same things between July-September of last year.
Although the cost of many things increased in 2009, there were dramatic reductions in two of the most important items monitored: gasoline prices and real estate prices, which offset the increases.
The method of calculating cost of living increases in federal benefits is set by the Congress through legislation. You should express your concern to your congressman and your two senators. If there are enough complaints, Congress might consider changing the formula to more accurately reflect the real increases in the cost of goods and services.
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