Monday, November 28, 2022

Consumer Gal: Inside the Social Security increase

| October 21, 2021 1:00 AM

On Oct. 13, the Social Security Administration announced a 5.9% year-over-year rise in monthly benefits for Social Security and Supplemental Security Income recipients. This is the largest cost-of-living adjustment raise in nearly 40 years.

The SSA says the 5.9% COLA will begin with benefits payable to Social Security beneficiaries in January 2022. Increased payments to SSI beneficiaries will start at the end of December 2021.

According to the SSA’s June 2021 numbers, the average monthly Social Security check was $1,555 for retirees. A 5.9% increase translates to an additional $92 per month.

The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is a broad measure of the price of food, energy, health care, housing and transportation, among other things.

It's interesting to note that when there is no reported inflation, there's no increase in benefits. So the 5.9% increase appears to be an acknowledgement that inflation is on the rise.

By comparison the increase in 2020 was 1.3% and in 2019, 1.6%. Unfortunately, Medicare prices will likely be rising, too, which will go to offset gains received in your Social Security benefit.

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Airlines and consumers

On the heels of Southwest Airlines canceling a large number of flights recently, a reader inquired if passengers have any recourse against the airline. Sadly, there is no obligation on the part of airlines to make consumers whole regardless of the cause.

In the US, the only time an airline is on the hook is if the passenger gets bumped off his flight due to overbooking. If your flight is canceled you do have the option of asking for a full refund, including any extra baggage fees paid, regardless of the nature of the original ticket, i.e. refundable or non-refundable.

You can also request the carrier book you on a different airline, though with fewer flights and high occupancy on most flights, this option may not work out either. The only other option is to check your credit card issuer to see if it offers any protections. Some do though they may be rare and getting rarer.

Airline travel appears full of risks these days as the massive flight cancellations Southwest experienced may happen more often. Different reasons were cited for the cancellations, so it just may happen again - especially as the holiday travel season approaches.

Plan your trip with flexibility in mind and make sure you have enough money set aside to cover unexpected hotel stays and meals since the airline likely won't offer you any help.

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Watch out for expensive dinner invites

Recently I received an invitation via email to attend a “free” dinner at a nice local restaurant. While the invitation was appealing because the restaurant has great food, the reason for the invitation wasn’t completely clear at first.

Turns out the invitation came from a financial advisor who was looking to expand his business. Basically what happens at these types of meetings is the prospect has to sit through an hour presentation about the benefits being offered by the company, then you do get to enjoy the meal being offered by that company.

This type of invitations is more likely to work with affluent people nearing or in retirement since this is the demographic that might need financial services. However, there are reasons why you might want to think twice.

Marketing strategies are designed to influence the recipient to act immediately and here’s how:

Reciprocity. The advisor was kind enough to buy the meal, the least I can do is hear him out and perhaps buy his product if it sounds at all useful.

Social Proof. There are people making follow up appointments, so maybe they know something I don’t and I don’t want to miss out.

Commitment. I did go to the dinner and book an appointment so I might as well follow through.

Authority. The sponsor seems to have credentials and his points make a lot of sense, plus the market can be unpredictable so maybe he knows something I don’t.

If you're in need of financial services, it's best to do your own research and not rely on being compelled to act because of a nice meal. If you do, that so-called free meal could turn out to be pretty expensive. In addition, you might become a target for constant solicitations going forward.

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Remember: I’m on your side.

If you have encountered a consumer issue that you have questions about or think our readers should know about, please send me an email at or call me at (208) 274-4458. As The CDA Press Consumer Gal, I’m here to help. I’m a copywriter working with businesses on marketing strategy, a columnist, a veterans advocate and a consumer advocate living in Coeur d’Alene.

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