COLA wars: Social Security beneficiaries won't get a raise next year
Filed under: Retirement, Economy, People, Healthcare
The Social Security Administration announced Thursday that there will not be a cost-of-living adjustment (COLA) next year -- marking the first year since 1975 that Social Security recipients have not had an annual increase.For 34 years, retirees have probably viewed the yearly COLA as their birthright. But the uptick isn't an in-step raise -- it's a benefit increase tied to the consumer price index for urban wage earners and clerical workers (CPI-W). In fact, until 1986, the CPI-W had to go up by at least 3 percent before social security beneficiaries would qualify for a COLA. Today, there only needs to be an increase of 0.1 percent before the Social Security Administration approves a COLA.
This year, the CPI fell by a shocking 1.3 percent -- the first such drop since 1955 -- which reflects a 29.7 percent drop in the price of gasoline and a 21.6 percent drop in overall energy costs. Food prices have dropped 15 percent off their high from mid-2008.
Fortunately for retirees, the yearly social security adjustment can only go up. For some recipients of federal benefits, including overseas members of the military, cost-of-living decreases can translate to drops in benefits. But even if CPI-W goes down, social security benefits cannot be reduced. In that sense, COLA might be a misnomer: A cost-of-living adjustment always increases benefits, so Cost-of-Living Increase might be a better term. (And if recipients of COLI got their notification by e-mail, then we'd have to call it E-COLI.)
At any rate, today's unwelcome news will disappoint Social Security beneficiaries, especially after the 5.8 percent benefit increase they saw this year -- the largest annual leap since 1982. This jump, tied to rising fuel prices last year, went a long way in 2009, as falling energy prices and a falling CPI-W translated into a boon to people on fixed incomes. And even as U.S. workers have face falling incomes and rising unemployment, 55 million retirees received $250 checks in May, and President Obama is lobbying for a second wave of $250 stimulus checks early next year.
Politically, these checks make a lot of sense. The President is not responsible for cost-of-living increases in social security, but he gets a fair measure of the blame when they don't go through. With midterm elections coming in 2010, Obama can hardly be blamed for greasing the wheels with America's biggest voting bloc.



























Reader Comments (Page 1 of 31)
10-15-2009 @ 4:47PM
Rob said...
The Social Security cost of living adjustment is messed up! There shouldn't be one at all!
http://robvstate.com/2009/10/10/social-security-cola/
Reply
10-15-2009 @ 8:31PM
linda said...
ROB, your evidently not retirement age, so that is why your thinking that way. just wait til your retirement age and then you will not be talking like that.
10-15-2009 @ 8:59PM
cynthia Flanagan said...
Maybe that is your opinion alone...I paid into SS for many years....am not one of the "wealthy" elders that have been referred to so many times...
I did my work, as a Nurse for 45 years...I worked 12 hr days, have you ever? I worked holiday's weekends and every other weekend...I did not have to lower myself for hand-outs as I earned through hard work ...I would not compromise my dignity and self respect to get food stamps, housing and "free care" It was good old hard work...so speak for yourself...Oh and as far as "you" knowing what is going on??? I doubt that ...you sound like a lazy un-employed stiff...a baby who never knew hard work..
I expect money I paid into...did you put money in a bank? well, I do not think you should get it either...I KNOW WHAT IS GOING ON! Out of the mouths of a wet behind the ears kid!
10-15-2009 @ 9:17PM
C.W.Hagert said...
Perhaps you don't draw S/S.....Maybe you don't have to depend on it as so many folks do.
I am one of the lucky ones, who don't depend on it either,but never would I make such a stupid remark.......
10-15-2009 @ 9:30PM
Bruce said...
What is it about a "cost of living adjustment" that is so hard to understand. The COLA is now, and always has been calculated according to a set of data relative to the costs of major life items. When the cost goes up, you get an upward adjustment. When the cost goes down, you don't. If it were truly accurately being figured, SS recipients would actually see a DROP in benefits.
If we happen to receive the $250 stimulus adjustment proposed by the President, please remember: this is a GIFT; you did nothing to EARN it; it is not now or in the future an ENTITLEMENT.
And before the infuriated mail starts, NO, I do not "hate seniors"-- in fact I AM one. I just don't believe that I am "entitled" to special treatment. I am very pleased to recieve my SS check every month, and will welcome any additional they care to give me. If you get social security, have a little gratitude. Just be glad there is a democrat in the White House, and say "thank you" when you receive it! In the mean time QUIT WHINING!
10-15-2009 @ 10:08PM
beverly said...
ROB...can't wait for your short comings when you retire...good luck.
10-15-2009 @ 10:14PM
lvn said...
Let's see. No raise possibly for 3 years, but prices of everything going up. At the senior complex I live in everyone got a letter stating..."due to the downturn in the economy there will be no more surplus food bags delivered to seniors." 90% of the seniors here depend on that food to last them till the next SS check. At times (too many)cans were dented and once the soup can was not only caved in and rusted but expired 3 1/2 years prior. Weevils and bread smashed beyond recognition and 99% of all other foodstuffs were expired. Yet, if farmers were to give the animals this digusting food, government agencies would be down on them right away. Had one woman say she knew there were bugs and rancid food, but even the dog food she used to buy was too expensive now.
10-15-2009 @ 10:44PM
redconvoy said...
Are you smoking something? They need the increase to live. You can't live on the same thing year after year with the cost of living going up and their Medicare premiums. So where ever you work, maybe you shouldn't have a raise. See how you could live on your same salary year after year!
10-15-2009 @ 10:44PM
jerry said...
You probably voted for Obama & are on a disiably. Above the neck that is. One day you will be in the seniors place & then you can relate to your pass mistakes
10-15-2009 @ 11:16PM
Teresa said...
Rob.
Why would you say such a thing. Doesn't cost of living go up each year. How do you expect people to survive if the cost of living goes up every year but yet the income does not go up.. mmmm If you know a trick please fill us fixed income ppl in. We would love to know how to do that.
10-16-2009 @ 12:20AM
fred said...
your veiw will change when you grow up(to retire). just because it doesn't help "you", you should think before you speak...
10-16-2009 @ 12:20AM
ycav4424 said...
Rob is probably somebody's snot nosed kid that has snuck onto their daddy's computer to rile up people just for fun before he changes his wet bed sheets again so he can sleep dry for awhile.
10-16-2009 @ 12:30AM
Akela said...
So Rob, are you ready for YOUR parents, and or grandparents to move into your home with you?? I hope so ..
10-16-2009 @ 12:32AM
mary myers-agati said...
MY rent will go up next year and so will many other things food and other necessities. I am slowley going blind and cant afford surgery.
10-16-2009 @ 12:37AM
cruisedoc said...
Of course there should be COL increases for SS. I don't think any reasonable person would debate that. Folks pay 7.65% into SS, and their employer must match that. The self employed pay the employer + the employee shares, or 15.3%.....quite a chunk of change. Payments need to be adjusted for inflation for obvious reasons. However, when their is no inflation, or negative inflation (deflation) as their is this year, then there is no rational argument for an increase. There should be no COL increase when the COL doesn't increase. If I were on SS I would just be glad that I get it when the COL goes up and don't get it decreased when the COL goes down. It's kind of like getting your cake and eating it too. I think America is fair w/ seniors, after all, they paid in pennies on the dollar for what they get out; now they should in turn be fair and be thankful that it is tied to the inflation rate.
10-16-2009 @ 12:44AM
MO said...
Once an idiot, always an idiot. I'm 66 yrs. old and worked all my life to get something I deserve. When you retire in a few years after you get out of your diaphers, are you going to turn down SS? Go crawl back under your rock you moron.
10-16-2009 @ 1:05AM
Sue said...
Last year I got a 3 cent raise. After 3 years with the company. The SS crowd needs to realize that those of us PAYING for them are having a hard time. I will never retire.
I can't afford to not eat. Right now I am supporting my mother in law so that she can do the home shopping thing..my husband took a job in Iraq so that we could pay her way in life. While she shops for stuff she does NOT NEED, and tells us that she deserves more..
10-16-2009 @ 1:17AM
Susan said...
SAY THAT WHEN YOU RETIRE ASSHOLE AND YOU GET THE SAME AMOUNT OF MONEY EVERY YEAR AND YOUR HEALTH INSURANCE GOES, YOU HIT THE "DONUT HOLE" IN MEDICARE WHERE YOU HAVE TO PUT OUT 4550.00 OUT OF YOUR OWN POCKET BEFORE CATASTROPHIC CARE KICKS IN. I KNOW, I TAKE CARE OF MY MOTHER WHO HAS ALZHEIMER'S. MAYBE WHEN YOU RETIRE, THERE WON'T BE ANY SOCIAL SECURITY LEFT, WHO YOU GONNA CRY TO THEN???
10-16-2009 @ 3:03AM
d r heller said...
rob and all the other imbeciles who have that type of attitude have to be living off their parents and have no concept what it is to be a retiree! just wait til u get to be eligible for ss and there isnt anything at all and u have to live on the street! we have the last laugh fool!!
10-16-2009 @ 4:11AM
Mary said...
Rob;
You are an jack ass. I hope your aged relatives read this. Shame on you!!