Cost Of Living Adjustment (COLA) is a misnomer because it is not designed to cover increases in the cost of living.
The Consumer Price Index (CPI), maintained and published monthly by the Bureau of Labor Statistics, keeps track of the price of each item on a list of specific goods and services. Because the CPI is an average, it is imperfect. Despite the imperfection, if COLA increases were directly proportionate to increases in the CPI, they would do a good job of keeping even with actual increases in the cost of living.
The problem is that no such direct relationship with the CPI exists in the formula that determines the amount of COLA. The formula guarantees that the greater the increase in the CPI, the less you can buy with today's larger check compared to yesterday's smaller check.
There are so many of my fellow retirees who are so much better off than myself financially, but there are also so many who are struggling in ways that I don't have to struggle. It's impossible for me to feel that I am more deserving or that I've worked harder... some of my former bosses would definitely concur. I just feel fortunate. Many times during my working life my last few dollars were spent putting food in my stomach the day before payday, hoping that my pay got deposited before anybody tried to cash the check I wrote the day before that.
In 1995 I purchased a new vehicle that came with the usual new-vehicle "complimentary" tank of gas and 30 or 45 days before the first payment was due. My down payment was made by trading in my previous vehicle. At the time I didn't have the money to fill the trade-in's tank with gas or to make the next payment on it, which was due in a few days. The preceding were not my REASONS for buying the new vehicle, but facts is facts.
Here is something I've found useful now that I have enough financial cushion to not be struggling on a day to day basis. It might be of interest to others who are in similar shoes. The interest rate paid by banks on savings and checking accounts ranges from pathetic to non-existent. A few years back I got a Paypal MC debit card, into which I can make deposits, online, directly from my checking account, with no fees on either end. The debit card works the same as a credit card. Paypal gives me cash back of 1% for any purchase I make using the card as a debit card and 1.5% cash back for any purchase I make using the card as a credit card. For many/most purchases, I can choose whether to use the card as debit or credit, and therefore choose to use it as a credit card whenever the option is available. There's no cash back if I use the card to withdraw cash... if there was I could get rich quick by just recycling the same money over and over! What I do is keep enough money in the Paypal account that I can use it for any and all credit or debit card purchases. I basically use it for all purchases that I make. $500 sitting for a month in my "interest checking" account at the bank for a month earns a few pennies. $500 spent in a month using the Paypal debit card earns $5 to $7.50, and I normally spend at least that much monthly with the card.
They have been working on improving it, as well as developing it's use for vaping for almost that long. I was in a video call and watched a demonstration of a prototype for vaping more than two years ago. Hopefully it is something new for us that works well.
