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Sixth Years of Record Low COLAs Unprecedented, Says Senior Citizens League

Logo for The Senior Citizens LeagueOct. 20, 2014 - The annual Social Security cost-of-living adjustment (COLA) will remain at record low levels again in 2015, says a new forecast by The Senior Citizens League (TSCL). According to the most recent consumer price index (CPI) data through August, TSCL forecasts that COLAs will be 1.7 percent in 2015. “That would make the sixth consecutive year of record low COLAs,” states TSCL Chairman, Ed Cates. “That’s unprecedented since the COLA first became automatic in 1975,” he notes.

Over the past five years COLAs have gone flat, along with the inflation index used to calculate them. Inflation has been growing so slowly that the annual increase has averaged only 1.4 percent per year since 2010. That’s less than half the 3 percent average during the prior decade. In 2010 and 2011, benefits didn’t increase at all. A 1.7 percent increase next year would not pull up the five-year average.


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While there’s still a month to go before the COLA announcement in October, and inflation data will likely change with the September CPI data, TSCL estimates that there’s only a small chance that it would greatly affect the 1.7 percent estimate. “The 2015 COLA will most likely be stuck in the low range of 1.6 to 1.8 percent,” Cates says.

Although the annual adjustment is provided to protect the buying power of Social Security payments, beneficiaries are reporting a big disparity between the boosts they receive and growing costs. According to a recent national survey by TSCL, the majority of Social Security recipients said that their benefits rose by less than $19 in 2014, yet their monthly expenses rose by more than $119. A 1.7 percent increase would only boost average Social Security benefits by about $20 next year.

According to a TSCL study, Social Security beneficiaries have lost 31 percent of their buying power since 2000. Low COLAs affect not only people currently receiving benefits, but also those who have turned age 60 and who have not yet filed a claim.

The COLA is part of the formula used to determine initial benefits and can mean a somewhat lower initial retirement benefit. A recent analysis for TSCL calculates that the past five years of low COLAs have impacted average Social Security benefits by about $3,942 since 2009, when compared with more normal levels of 3 percent.

According to the analysis, average benefits rose from $1,062 per month in 2009 to $1,135.70 per month in 2014. But had COLAs been the 3 percent norm, benefits would have increased to $1,231.10 per month — $95.40 more.

Despite the lack of growth in Social Security benefits, COLA reductions remain a key proposal under consideration in Congress to reduce Social Security deficits. A leading proposal would use the more slowly – growing “chained” consumer price index to calculate the annual increase. In the past, the government has made numerous changes to the methodology it uses to calculate consumer price increases. Those changes since the late 1990s have already resulted in lowering the measured rate of inflation by 0.7 percentage point per year, according to the Congressional Budget Office.

TSCL warns that the “chained COLA” proposal may come under debate again soon. The Social Security Trustees recently forecast that the Social Security Disability Trust Fund is facing insolvency by 2016, and that changes to the program will have to be made to avoid a reduction in disability benefits of 20 percent. Instead, TSCL supports legislation that would provide a more fair and adequate COLA by using the Consumer Price Index for the Elderly (CPI-E) to determine the annual boost.

To learn how COLA cuts could affect your retirement income, try TSCL’s chained COLA calculator. Visit TSCL’s website at

About The Senior Citizens League

With about 1 million supporters, The Senior Citizens League says it is one of the nation’s largest nonpartisan seniors groups. Located just outside Washington, D.C., its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of TREA The Enlisted Association. Please visit or call 1-800-333-8725 for more information.


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