No Social Security COLA Increase in 2011

October 12th, 2010  |  Published in Social Security  |  5 Comments

According to several news sources it appears unlikely that there will be a cost of living adjustment (COLA) increase for Social Security in 2011. This would be the second year in a row without an increase. The COLAs are set automatically according to the Consumer Price Index for Urban Wage Earners and Clerical Workers. This index has been used since 1975 Since the CPI-W is still not at the levels it was in 2008 the measure does not call for increases to Social Security.

Many feel that the CPI-W does not accurately reflect inflation as it applies to the elderly. With Social Security already facing shortfalls it is doubtful Congress would adopt a different measure that would lead to more and larger increases in Social Security benefits. It is possible that there will be a special one-time payment of $250 if Congress passes a bill calling for one. A similar measure this year did not pass though.

On the bright side it is predicted that there will be sufficient inflation as measured by the CPI-W to lead to an increase in 2012.

Visit the Social Security website for more information on how COLA benefits are calculated.