No Social Security cost of living adjustment for you!
For 50 million Americans currently collecting Social Security, the news that they will receive no yearly cost-of-living adjustment this year for the first time since the COLA was added to the program in 1975 is distressing. However, is it unfair?
The COLA is based on the Bureau of Labor Statistics' Consumer Price index, a monthly and yearly computation that more or less reflects the change in prices of 200 products. The products fall within eight categories; Food and Beverages, Housing, Apparel, Transportation, Medical Care, Recreation, Education and Communication, Other goods and services. It does not include income and Social Security tax, or changes in value of investment items and real estate.
At the end of 2008, SS recipients were given a 5.8% COLA, although the CPI was only up 3.8% for the year. While this might seem like a bonus, remember that 2008 was an atypical year, with energy costs driving the index up to a high of 219.086 before falling back to 215.303 at the end of the year.