Find a credible online source to determine a realistic cost of living adjustment over one year's salary. (For example, you can use the U.S. Social Security administration's COLA or one based on the Consumer Price Index (CPI) given by the Bureau of Labor Statistics.) You can find a general nation-wide COLA or a specific one for your city or geographic area.
A cost of living adjustment (COLA) is an annual increase in salary or benefits that is meant to compensate for inflation and the rising cost of living expenses.
Next, locate a typical starting salary for a career you are interested in. What kind of annual raise would you need to adjust for the rising cost of living (according to the COLA you are using)?
Find a Cost of Living Adjustment from a credible online source (such as the Social Security Administration's COLA or the Bureau of Labor Statistics' Consumer Price Index (CPI). Then find a typical starting salary for a career in which you are interested. Share this on the forum as a salary for your (theoretical) first year on the job.
Use the COLA percentage rate to calculate five annual raises (equivalent salaries for your 2nd, 3rd, 4th, 5th, and 6th years on the job). Just adjust for the rising cost of living. Do not take into account merit-based promotions and raises.
Remember to include your sources. Show where you found your COLA as well as where you found your typical starting salary. (It might help to post links to the web sites where you found this information.)
Let's take a look at Khianna's COLA post:
When I grow up, I want to be a marine biologist. A typical starting salary for a Marine Biologist is $41,400 according to the U.S. Bureau of Labor Statistics. Since I figure that South Florida would be a good place for a Marine Biologist to live, I used the Bureau of Labor Statistics' CPI for Miami/Ft. Lauderdale (which is 1.6%) as my COLA. If I got a marine biologist job that paid a $41,400 salary for the first year, I would need the following salaries in subsequent years to maintain the same standard of living (assuming a 1.6% COLA)
2nd year: $42,062.40 ($41,400 • 1.016)
3rd year: $42,735.40 ($42,062.40 • 1.016)
4th year: $43,419.17 ($42,735.40 • 1.016)
5th year: $44,113.70 ($43,419.17 • 1.016)
The fifth year on the job should come to a close with another cost of living raise (that would go into effect at the beginning of the 6th year).
6th year: $44,819.52 (44,113.70 • 1.016)
To find a credible online source for determining a realistic cost of living adjustment, you can use the U.S. Social Security Administration's COLA or the Consumer Price Index (CPI) given by the Bureau of Labor Statistics. Here are the steps to find this information:
1. Go to the U.S. Social Security Administration's website (www.ssa.gov) and navigate to the COLA page. The direct link is: https://www.ssa.gov/cola/
2. On this page, you will find the most recent COLA percentages for different years. The COLA reflects the increase in the cost of living and is used to adjust Social Security and Supplemental Security Income benefits.
3. For the Consumer Price Index (CPI), go to the Bureau of Labor Statistics' website (www.bls.gov) and search for the CPI. You can also directly visit the CPI page: https://www.bls.gov/cpi/
4. On the CPI page, you will find various resources and information about the CPI, including national and regional CPIs.
For example, let's use the U.S. Social Security Administration's COLA of 1.6% for the next year. We'll assume this as the COLA to determine the annual raises for our theoretical career.
Next, let's find a typical starting salary for a Marine Biologist. According to the U.S. Bureau of Labor Statistics, a typical starting salary for a Marine Biologist is $41,400.
Using the 1.6% COLA, we can calculate the annual raises for the second, third, fourth, fifth, and sixth years on the job as follows:
2nd year: $41,400 * (1 + 0.016) = $42,062.40
3rd year: $42,062.40 * (1 + 0.016) = $42,735.40
4th year: $42,735.40 * (1 + 0.016) = $43,419.17
5th year: $43,419.17 * (1 + 0.016) = $44,113.70
At the end of the fifth year, you would receive another cost of living raise that would go into effect at the beginning of the sixth year. So the salary for the sixth year would be:
6th year: $44,113.70 * (1 + 0.016) = $44,819.52
Sources:
- U.S. Social Security Administration COLA: https://www.ssa.gov/cola/
- U.S. Bureau of Labor Statistics CPI: https://www.bls.gov/cpi/
- U.S. Bureau of Labor Statistics Occupational Outlook Handbook - Marine Biologists: https://www.bls.gov/ooh/life-physical-and-social-science/zoologists-and-wildlife-biologists.htm