No Social Security COLA means flat DC limits, too

As might be expected, news about the lack of a raise isn’t sitting well with current Social Security recipients either.

They will face higher costs of goods and services that retirees use more of—such as medical care and pharmaceuticals—without any increase in their checks to help pay for them.

And the price is rising faster on those categories than it is on other staples, such as food and clothing.

The culprit is the low price of fuel, which has depressed the Bureau of Labor Statistics’ Consumer Price Index—whose full name is actually the Consumer Price Index for Urban Wage Earners and Clerical Workers.

But retirees’ consumption and spending habits are so different from those of workers that advocates for seniors say that the standard by which the cost of living should be measured is actually the CPI-E, in which the E stands for elderly.

So far, however, efforts to change that have come to naught.

As a result, under the standard CPI, Social Security won’t be increasing, but some 30 percent of retirees will be facing higher Medicare Part B premiums this year. That means they’ll effectively get less of their retirement income—which, for higher-income recipients, may still come from Social Security or may instead come from such sources as the old Civil Service Retirement System.

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