Will there be a 2015 SSI COLA increase?

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What will the 2015 SSI COLA increase be? That’s the question 60 million social security recipients will be asking later this year when the  Social Security Administration (SSA) has officially announces the COLA increase. Per the update below the 2014 COLA raise was 1.5%, but most experts are predicting a lower (or maybe no) increase this year.

The COLA increase is based on the percentage increase (if any) in the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year over the average for the third quarter of the previous year in which a COLA became effective. The government publishes the official annual cost-of-living adjustments typically in late October, with changes to social security, retiree benefits and medicare effective for the subsequent year.

Based on the government’s most recent inflation data, CPI (inflation) was so low that should the trend continue through the third quarter of the year, inflation would be about 2% lower than the same period last year. That would mean no or minimal COLA would be payable in 2015.

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[2014 COLA Increase of 1.5% and Social Security Taxable Maximum Increase Provides Little Relief] In line with the CBO estimate provided below, the Social Security Administration (SSA) has officially announced a 1.5% cost-of-living adjustment (COLA) increase for 2014 based on final September inflation figures. The maximum amount of 2014 earnings (taxable maximum) subject to the Social Security tax will be $117,000, up from $113,700 in 2013. The SSA estimates that of 165 million workers who will pay Social Security taxes in 2014, about 10 million workers will pay higher taxes as a result of the increase in the taxable maximum.

Over 60 million social security recipients will be impacted by this change when in takes effect in January 2014. For the average retired worker the 1.5% raise equals about $19 more per month for a total monthly average income of $1,272. The COLA figure will also impact 2014 Medicare limits and adjustments to 2014 401K and IRA contribution limits.

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[September 2013] The Congressional Budget Office has forecast a 1.5% COLA raise in 2014 based on preliminary CPI-W data. This is 0.2% less than the 2013 increase and is below 2014 inflation forecasts. The Social Security administration has to officially confirm this figure (around mid-october), but if accurate Social Security and Supplemental Security Income (SSI) benefits for over 60 million Americans will increase by 1.5 percent in 2014. The 2014 increase is significantly below the 2013 increase of 1.7% and 2012 COLA increase of 3.6%, reflecting a persistent low inflation and interest rate environment.  The 1.5% increase will be seen in January 2014 payments. For the average retiree this is equivalent to an extra $19 a month.

Retiree pay increases for military and federal civilian workers is also linked to the COLA adjustment and is automatically adjusted on an annual basis. Federal retirees, whether they are covered by the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS), will receive the full COLA adjustment. According to the government formula, if the full COLA increase is 3 percent or higher, as it was for 2012, FERS retirees receive 1 percent less than the full increase. So FERS retirees received 2.6 percent for 2012. If the COLA falls between 2 percent and 3 percent, then FERS retirees would receive 2 percent. If the increase is less than 2 percent, as it is in 2013, FERS retirees receive the same as CSRS retirees. In other words, 1.7 percent.

However, adjustments in veterans’ benefits covering disability and survivor are not automatic, and must be approved by Congress and signed into law by the president.

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{ 5 comments… read them below or add one }

MyNameIsEarl July 6, 2014 at 9:51 pm

I think that people who believe prices haven’t gone up in 2014 either have someone else who does their shopping or have a IQ of a Mud Turtle….The price of Meat both Pork and Beef have gone up at least 20%….the price of Milk and Bread have gone up….the price of renting your apartment has gone up and Utilities have gone up…so how the heck can someone say that they haven’t gone up is either a Republican who is middle class or Wealthy or is Paul Ryan (R-WI)….given prices go up about an average of 3% a year and the COLA for Senior Citizens and the Military Disabled are given under President Obama a average of 1% is crazy….We Senior Citizens are getting shafted by a loss of 2% a year, and God if a Republican gets in the White House in 2016 there will not be a COLA anymore…..People….you have to press and let yourselves be strongly and clearly heard that they need to close the Loop Holes on the Rich and Millionaires who DON’T pay a penny of taxes or pay very, Very little in taxes…..THE RICH GET RICHER AND THE POOR GET POORER!!!!….Time for not letting the wealthy and Rich get away with it and Time for a March down Washington’s Mall…..

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S. B. September 12, 2013 at 11:05 pm

@gail: Chained CPI has historically been about a quarter percentage point less than CPI-W (or CPU-U for that matter).

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gail September 11, 2013 at 11:59 pm

This just confirms that we need to support President Obama’s proposed “chained CPI” for retirees in his 2014 budget request. Then we all get more.

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Andy (Author) October 30, 2013 at 12:15 pm

The increase is among the smallest since automatic adjustments were adopted in 1975. It is small because consumer prices haven’t gone up much in the past year.

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MyNameIsEarl July 6, 2014 at 9:55 pm

Your plain Goofy….I guess you haven’t gone shopping for Meat or Milk or anything right?…Such a dumb statement by you…..

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