Attention seniors! You may not be receiving your cost of living adjustment (COLA) this year.
We must understand that the COLA increase is based on the Consumer Price Index (excluding food and energy) This is called the "Core CPI." The Core CPI, excluding volatile food and energy, actually rose 1.5% on an annual basis.
About 50 million retired and disabled Americans receive Social Security. Since 1975 Social Security payments have increased based on the cost of living adjustment.
Of this group, 32 million Americans are in the Medicare prescription drug program. Average monthly premiums are set to go up from $28.00 to $30.00 next year. If there is not COLA increase, your Social Security benefit actually will shrink.
Premiums for Part B coverage for doctor's visits are also scheduled to go up next year. These are often deducted from your Social Security payment. So there again, if there is no increase in your Social Security, your check will shrink even more.
Critics argue that seniors should not get an increase because supposedly there is no inflation. I think we need to ask seniors if their food bill and their utility bills went up over the past year. The answer is probably "yes." Keep in mind that COLA does not include your increase in food prices or utility bills.
Social Security has longer-term problems. In 2016, the retirement program is expected to pay out more than it takes in. This is another problem that President Obama intends to tackle next year.
October is the month when the Social Security Administration announces payments for next year.
Should your COLA be changed to include food and energy?