By Diane M. Wilson CFP® On October 13, 2017, the Social Security Administration announced the cost of living adjustment (COLA) will increase 2.0 percent for 2018. The increase will apply to Social Security retirement benefits and Supplemental Security Income (SSI) benefits.
The COLA applies to Social Security retirement benefits payable in January 2018. More than 61 million beneficiaries receive retirement benefits. Supplemental Security Income benefits will increase on December 29, 2017. More than 8 million beneficiaries recieve SSI benefits.
Cost of living adjustments (COLA) are determined by the Department of Labor’s Bureau of Labor Statistics. The annual COLA is tied to the increase in the Consumer Price Index as required by the Social Security Act.
For August 2017, the Social Security Administration shows the average retired worker receives $1,371.14 a month, which means $27.48 extra a month in the pockets of the average beneficiary.
The 2 percent increase for 2018 is the largest since 2012. Beneficiaries in 2012 received a 3.6 percent increase. The COLA’s for the past six years were:
- 2017 — 0.3 percent
- 2016 — 0 percent (no adjustment)
- 2015 — 1.7 percent
- 2014 — 1.5 percent
- 2013 — 1.7 percent
- 2012 — 3.6 percent
Information about Medicare changes for 2018, will be available at www.medicare.gov.
The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.