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BUSINESS Saturday 13 OctOber 2018
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Social Security checks will grow in 2019 as inflation rises

By RICARDO ALONSO- health care and housing.
ZALDIVAR They want the government
Associated Press to switch to an index that
WASHINGTON (AP) — Tens reflects the spending pat-
of millions of Social Security terns of older people.
recipients and other retir- “What the COLA should be
ees will get a 2.8 percent based on is still a very real
boost in benefits next year issue,” said William Arnone,
as inflation edges higher. CEO of the National Acad-
It’s the biggest increase emy of Social Insurance,
most retired baby boomers a research organization
have gotten. not involved in lobbying.
Following a stretch of low “Older people spend their
inflation, the cost-of-living money in categories that
adjustment, or COLA, for are going up at a higher
2019 is the highest in seven rate than overall inflation.”
years. It amounts to $39 a The COLA is now based
month for the average re- on the Consumer Price In-
tired worker, according to dex for Urban Wage Earn-
estimates released Thurs- ers and Clerical Workers,
day by the Social Security or CPI-W, which measures
Administration. price changes for food,
The COLA affects house- housing, clothing, trans-
hold budgets for about one In this Feb. 11, 2005 file photo, trays of printed social security checks wait to be mailed from the portation, energy, medical
in five Americans, includ- U.S. Treasury’s Financial Management services facility in Philadelphia. care, recreation and edu-
ing Social Security benefi- Associated Press cation.
ciaries, disabled veterans too meager and doesn’t analyst Mary Johnson, of ship. Advocates for the elderly
and federal retirees. That’s reflect higher health care the nonpartisan Senior Citi- Health care costs eat up would prefer the CPI-E,
about 70 million people, costs for older people. Fed- zens League. about one-third of her in- an experimental measure
enough to send ripples eral budget hawks take the Her Medigap insurance for come, she estimated. from the government that
through the economy. opposite view, arguing that costs not covered by Medi- “I appreciate the COLA reflects costs for house-
Unlike most private pen- increases should be small- care is going up, and so is adjustment, and in no way holds headed by a person
sions, Social Security has er to reflect consumers’ her prescription drug plan. am I complaining,” Deakin age 62 or older. It usually
featured inflation protec- penny-pinching responses She expects her Medicare added. “It’s just that every outpaces general inflation,
tion since 1975. Beneficia- when costs go up. Part B premium for outpa- single thing you can talk though not always.
ries also gain from com- With the COLA, the estimat- tient care will also up. about goes up. It doesn’t COLAs can be small or zero,
pounding since COLAs ed average monthly Social “It isn’t enough of an in- go down.” as was the case in several
become part of their un- Security payment for a re- crease that it takes care By law, the COLA is based recent years. People often
derlying benefit, the base tired worker will be $1,461 a of all of the increases from on a broad index of con- blame the president when
for future cost-of-living in- month next year. health care, plus rent — our sumer prices. Advocates that happens. However,
creases. “For more recent retirees, rent gets increased every for seniors claim the gener- the White House can’t dic-
Nonetheless many retirees the 2019 COLA will be the year,” said Deakin, 70, who al index doesn’t accurately tate the COLA, which is
and their advocates say largest increase they have worked in the finance de- capture the rising prices calculated by nonpolitical
the annual adjustment is gotten to date,” said policy partment at a boat dealer- they face, especially for experts.q

Citigroup profit rises to $4.6 billion, beats Street views

By KEN SWEET Citi was able to grow prof- passed last year.
Associated Press its despite a small drop in The amount of money the
NEW YORK (AP) — Citigroup revenue compared to a bank set aside for income
said Friday that its third- year earlier. The bank’s taxes last quarter was down
quarter profits rose 12 per- revenue was $18.39 billion 21 percent from a year ear-
cent from a year earlier, as in the quarter, down from lier.
the banking conglomerate $18.42 billion a year earlier. One place of weakness
was able to cut expenses That’s despite the steady this quarter was Citi’s credit
and benefited from lower rise in interest rates in the card division, one of the
taxes. That was more than last year. While Citi earned bank’s bigger businesses in
enough to make up for a more in interest income last the U.S. Branded card rev-
small drop in revenue. quarter, the bank also had enue slipped 3 percent last
The New York-based bank to pay more for deposits, quarter from a year earlier,
earned $4.62 billion in the which effectively negated despite higher interest rate.
third quarter, up from $4.13 any gains. Citi’s investment banking
billion a year ago. Citi Expenses were down 1 per- division had a relatively In this March 16, 2017, file photo, a customer enters a Citibank
earned a profit of $1.74 per cent from a year earlier. strong quarter. Net income branch, in New York.
share, which was better Most of Citi’s profit growth for Citi’s institutional clients Associated Press
than the $1.68 a share that came because of lower group was up 2 percent and currencies, one of Ci- ing on Friday to $69.20
was expected according taxes. Like other big com- from a year earlier. The ti’s specialties. a share. Citi’s shares are
to a survey of analysts’ by panies, Citi got a big tax banks saw higher trading Shares of Citi rose 1.2 per- down roughly 6 percent this
FactSet. break from the tax law revenue in stocks, bonds cent in late-morning trad- year.q