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Financial Focus: COLA Stands as the Best Measurement of Our Economy

Many economists and sadly many politicians try to tell you many falsehoods (unintentionally) as to where our US economy: Was? How it’s going? Where is it going to go?

In my opinion, one only has to look at the COLA adjustments that take place in our economy. COLA, an acronym for Cost Of Living Adjustments, looks to ensure your dollars adjusts up or down, based on the health of the economy.

People receiving Social Security, for example, receive COLA adjustments annually, reflecting a bigger or smaller paycheck, “the following year” based on the health of our economy.

“The following year” is the key!

Social Security benefits were 0 percent in 2016. They were 0.8 percent in 2017,  two percent in 2018 and it now projected to be 2.8 percent in 2019.

Teachers, another example. Their most recent UFT union deal will provide the city’s 76,000 teachers salary increases of two percent in February, 2.5 percent in May of 2020 and three percent in May of 2021, officials said.

If you are a fan of our articles then you know we wrote an article let explaining the dramatic spending shift of spending  in our economy, from consumer to businesses. Most of this has been created by the Administration recent “tax reform” bill.

In one sense it’s pretty amazing that President Donald Trump, as a candidate in 2016, said throughout his campaign, that “our economy can grow faster, to three percent.”

I can tell you personally when he said that. The financial world gasped! Two years and stock market growth of 40 percent later, annual economic growth of three percent does look achievable.

But wait! There’s a bump in the road. It is a sign. It says, “Federal Reserve Board keeps making interest rates higher.” Jay Powell, current chairman says, “it’s to slow the growth of money and the economy a bit while it’s still growing”.

Translation, get ready my young Social Security recipients and teachers in 2022. The checks could be smaller

For non. social security people, it means to get ready for an adjustment of your investment or 401(k)s accounts. Lower growth means lower growth–on investments (most). Now is the time to call your advisor for a “2020 “financial tune-up,” which should be implemented by no later than July of 2019.

You say it’s too early? Well, I have a “Facebook friend” who works in the City Comptroller’s office who recently said to me, “I want to be able to understand the trend of the stock market to be ahead of the curve.”

My posting response: “You are the trend!”

Call your advisor for a futuristic checkup now.

Until then, enjoy the next six to nine months.

Anthony Rivieccio is the founder and CEO of The Financial Advisors Group, celebrating its 20th year as a fee-only financial planning firm specializing in solving ones financial problems. Mr. Rivieccio, a recognized financial expert since 1986, has been featured by many national and local media including: Klipingers Personal Finance, The New York Post, News 12 The Bronx, Bloomberg News Radio, BronxNet Television, the Norwood News, The West Side Manhattan Gazette, Labor Press Magazine, Financial Planning Magazine, WINS 1010 Radio, The Bronx News, and The Bronx Chronicle. Mr Rivieccio is also currently an Adjunct Professor of Business , Finance & Accounting for both,  City University of New York & Monroe College, a Private University.  For financial assistance , Anthony can be reached at  (347) 575-5045Feel free to visit their FACEBOOK Business page for past Financial Focus articles:  www.facebook.com/iwantmytaxmoney

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