Government shutdown delays Social Security COLA announcement

Labor Department says CPI report will not be released next week.
OCT 30, 2013
The U.S. Department of Labor will not issue the September Consumer Price Index report on October 16 as originally scheduled due to the federal government shutdown. Without the September CPI figures, the Social Security Administration will not be able to calculate the cost-of-living allowance for Social Security beneficiaries for 2014. Normally, SSA issues its COLA announcement, which affects benefits as well as the inflation-adjusted taxable wage base for the following year, in mid-October. A phone call to SSA, which is short-staffed due to the government shutdown, was not returned. "The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation," according to the SSA website. "It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year." Last year, the COLA increased 1.7% for benefits and taxable wages in 2013. Earlier this year, the Conressional Budget Office estimated that the COLA would increase by 1.5% for 2014. A 1.5% increase would boost the average Social Security benefit by about $19 per month to $1,280 and hike the taxable wage base by about $1,750 to $115,405 per year. “The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount. The Medicare portion (HI) is 1.45% on all earnings. Now, we'll all have to wait a bit longer to see if the CBO is right.

Latest News

Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034
Social Security trustees see one less year in insolvency countdown, project shortfall to start 2034

New report shows dimmed outlook for benefits to retirees and disabled Americans, creating further pressure for federal tax hikes or more borrowing.

NY Republican Stefanik presses SEC to probe Harvard bond sale
NY Republican Stefanik presses SEC to probe Harvard bond sale

Open letter to SEC Chair Paul Atkins questions whether the Ivy League university withheld material information prior to its $750 million taxable bond offering.

Ex-LPL leader re-emerges at The Wealth Consulting Group
Ex-LPL leader re-emerges at The Wealth Consulting Group

The Las Vegas-based hybrid RIA overseeing $8.8 billion in assets has named Andy Kalbaugh president to help scale its advisor platform.

Envestnet extends investment offerings with new alts model portfolios
Envestnet extends investment offerings with new alts model portfolios

The wealth tech giant – in collaboration with Fidelity, BlackRock, State Street, and Franklin Templeton – is offering its advisor and wealth firm users more ways to diversify.

Just as wealth industry M&A was picking up, economic uncertainty could kill it again
Just as wealth industry M&A was picking up, economic uncertainty could kill it again

Deal volume increased post-election but now caution has taken over.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave