Social Security News for Senior Citizens
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No Social Security COLA in 2016 for Senior Citizens
July 27, 2015 – If you were counting on a few extra bucks in your Social Security check in 2016, you made a mistake. The opinion of the experts, including the trustees, is senior citizens will not see a cost-of-living (COLA) in 2016.
● “The Bureau of Labor Statistics on Friday released another data point that provides a glimpse into the potential cost-of-living increase for federal retirees in 2016, and it doesn’t bode well,” reports the Government Executive website.
● “Nearly 60 million Social Security recipients will probably not get a cost-of-living increase next year, according to projections in the 2015 Social Security and Medicare trustees reports, writes Eileen Ambrose in her AARP Blog.
"Social Security doesn't expect to pay any cost-of-living adjustment, or COLA, to beneficiaries in 2016 because inflation hasn't been high enough to justify it,” notes Jennie L. Phipps in her Bankrate.com blog.
She points out that in the report issued by the Social Security Trustees last week that made it crystal clear they see no COLA in 2016. On page 114 they said, "...projections under the intermediate and high-cost assumptions do not have a cost-of-living adjustment for December 2015. Under all three sets of economic assumptions, the projections include annual cost-of-living adjustments in all future years after 2015."
● “Social Security recipients had better be ready to taste the un-COLA -- not the soft drink, but a likely zero Cost of Living Adjustment (COLA) for Social Security benefits in 2016, according to the Palm Beach Post.
Phipps wrote in further explaining why seniors will get no COLA in 2016, “In 2015, Social Security recipients got a measly 1.7 percent raise -- and many complained about that. But next year is almost certainly going to be worse -- zero percent -- because the Consumer Price Index for Urban Wage Earners and Clerical Workers, CPI-W, as calculated by the Department of Labor, has gone down since January.”
But all these prognosticators last week are far behind the Senior Citizens League, which said on June 2 –
● “The plunge in gasoline prices, in recent months, sent the consumer price index (CPI) into a nose dive. That deflation is expected to make a big dent in the Social Security income of 56 million people next year, according to new cost-of-living adjustment (COLA) estimates prepared for TSCL. As inflation data continues to come in, early projections indicate that the COLA for 2016 is likely to be zero.”
Government Executive points out “The average of the July, August and September 2015 consumer price numbers, along with the average figure from the third quarter of 2014, is used to calculate the 2016 COLA. The annual COLAs are based on the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective. In this case, that is 2015 and 2014.
“If there’s no percentage increase, there’s no COLA.
“Retirees received a 1.7 percent COLA increase for 2015, a 1.5 percent boost for 2014, a 1.7 percent increase for 2013 and a 3.6 percent bump for 2012. The 2012 COLA increase was the first since October 2008 (which took effect in 2009).”
AARP Chief Executive Officer Jo Ann Jenkins offered the following reaction to the Social Security Trustees report issued last Wednesday.
“In its 80th year, Social Security remains the bedrock of a secure retirement for millions of Americans who have paid in over a lifetime of hard work. For children and spouses who lose an immediate working family member to workers with disabilities, Social Security remains part of the fabric of our lives to protect families from both expected and unexpected challenges we may face.
“Today’s report shows that we must seek meaningful, in some instances even urgent, changes to ensure the program is on stable ground for future generations. An honest, open, national discussion about the value of Social Security and its importance to millions of retired workers, spouses, children, veterans, and persons with disabilities remains the clear path forward for this crucial component of economic security.
“While the Trustees once again report that the combined Old Age, Survivor and Disability Insurance Trust can pay full retirement, survivor and disability benefits for approximately two more decades, we know that if no action is taken, benefits will be cut by nearly 25% in 2034. As the campaign season gets underway, we will be urging all Presidential candidates to share their plans for the long term solvency and adequacy of Social Security.
>> Fact sheets from the AARP Public Policy Institute provide national and state data on Social Security as a key source of retirement income. Please also visit www.aarp.org/ppi and search on “Social Security.”
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Social Security was signed August 14, 1935 - May 27, 2015