2016 Cost of Living Adjustment: Not This YearPosted October 22, 2015 by Premier Disability Services, LLC® The Social Security Administration has announced some sad news for beneficiaries eagerly anticipating a cost of living adjustment (COLA) in 2016. For only the third time since COLAs began in 1975, there will be no adjustment to benefit rates in 2016 based on cost of living. SSA reports that benefits are increased annually to keep up with increased cost of living as measured by the Consumer Price Index. According to SSA, there has actually been a decline in the Consumer Price Index which means no COLA is warranted for 2016.
Unfortunately, the lack of COLA could be further exacerbated by the fact that Medicare Premiums may potentially increase for higher income retirees, new enrollees in Medicare 2016, and anyone enrolled in Medicare but not receiving Social Security benefits. For beneficiaries who fall into these groups, there actually may be a reduction in their monthly benefit amount once the increased Medicare Premium is taken out.
While this is certainly difficult news, this is not the first time there has been a lack of COLA. In both 2009 and 2010, SSA did not increase benefit rates due to COLA. From 2011 to 2014, there was an increase each year. It will be interesting to see if the decline in the Consumer Price Index continues, or if 2017 will bring about additional increases in benefit amounts.
By: Thomas A. Klint of Premier Disability Services, LLC®