Broker Check

No Social Security COLA in 2016? We'll see.

September 01, 2015
Share |

It looks like Social Security recipients might not get a cost of living adjustment (COLA) in 2016. This would be only the third time this has happened since COLA's became automatic in 1975. It’s also interesting to note that the other two times this happened were in 2010 and 2011. And to add fuel to the fire, certain high-income recipients might see their net benefits go down because of higher Medicare premiums.

Why no COLA?

Since 1983, COLA's have been automatically tied to the CPI-W, or the Consumer Price Index for urban wage earners. If the CPI-W isn't higher during the 3rd quarter compared to last year's 3rd quarter figures, then there will be no COLA. If it is higher, then a COLA will take effect in January.

We will find out for sure when the official announcement is made in October.