The government is scheduled to announce the COLA — or lack of one — on Thursday, when it releases the Consumer Price Index for September. Inflation has been so low this year that economists say there is little chance the September numbers will produce a benefit increase for next year.
Prices have dropped from a year ago, according to the inflation measure used for the COLA.
“It’s a very high probability that it will be zero,” said economist Polina Vlasenko, a research fellow at the American Institute for Economic Research. “Other prices — other than energy — would have to jump. It would have to be a very sizable increase that would be visible, and I don’t think that’s happened.”
Congress enacted automatic increases for Social Security beneficiaries in 1975, when inflation was high and there was a lot of pressure to regularly raise benefits. Since then, increases have averaged 4 percent a year. Only twice before, in 2010 and 2011, have there been no increases.
In all, the COLA affects payments to more than 70 million Americans. Almost 60 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,224.
The COLA also affects benefits for about 4 million disabled veterans, 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor. Many people who get SSI also receive Social Security.
Carol Mead of Montrose, Pa., said she and her husband were counting on the Social Security COLA to help them with their finances.
“My husband is working just so we can pay our bills,” said Mead, a retired land-use administrator. “He’s 70 years old, and he’s still working in a stone quarry. He’s told me a number of times that he thinks he’s going to have to work until the day he dies.”
More bad news: The lack of a COLA means that older people could face higher health care costs.
Most have their Medicare Part B premiums for outpatient care deducted directly from their Social Security payments, and the annual cost-of-living increase is usually enough to cover any rise in premiums. When that doesn’t happen, a long-standing federal “hold harmless” law protects the majority of beneficiaries from having their Social Security payments reduced.