Seniors to get puny Social Security COLA

By Mary Beth Franklin

Oct 14, 2012 @ 12:01 am (Updated 6:01 pm) EST

Social Security recipients will receive a cost-of-living adjustment for 2013, but it will be only about half as large as the COLA they received this year, according to an unofficial estimate by the American Institute for Economic Research, an independent economic research group.

AIER economists estimate the 2013 increase to be between 1.5% and 1.7%, 2 percentage points below the 3.6 % increase this year.

The Social Security Administration will announce the official COLA for 2013 tomorrow. The federal government determines the size of a Social Security COLA based on the percentage change in the Consumer Price Index for Urban Wage Earners from the third quarter of one year to the third quarter of the next.

“Because the CPI-W includes items with prices that rise more slowly than everyday purchases — refrigerators, for example — as well as items that get cheaper over time, the increase in Social Security checks coming in January may not be sufficient to cover the rising cost of everyday goods,” said Steven Cunningham, director of research and education for the AIER.

“Seniors who rely on their Social Security checks to cover everyday expenses — food, utilities, gasoline and medical care — may find that a 2013 increase of 1.5% to 1.7% will fail to keep pace with rising prices,” he said.

mbfranklin@investmentnews.com Twitter: @mbfretirepro

  @IN Wire

Apr 24 06:17AM
Just curious: Anybody using Sprout Social to manage their social media content? If so, what do you think? Is it worth the cost?
Apr 24 06:10AM
The Metamorphosis of the Bond Bears http://t.co/eaTtLlXUbV

Career Center

Explore your opportunities and be informed for your next move.

Company Type
Firm Type
Clearing Firm
Presented by

Most Watched Video

7:12The 2 biggest factors driving growth in active ETFs

Ugo W. Egbunike Dir. Of Business Development, ETF.com Greg Crawford Deputy Editor, InvestmentNews

Video Spotlight
1:47People are Living Longer. Good News or Bad News?

Sponsored by Oppenheimer Funds Inc.