COLA

The social security annual cost of living increase is referred to as a "COLA" determination or the annual "Cost of Living Adjustment." Since 1975, the social security administration's general benefit increases have been based on increases in the cost of living as measured by the Consumer Price Index. The automatically increased amounts, if any, are published in the Federal Register each year in late October. Automatic increases affect OASDI benefits, Retirement benefits, and Supplementary Security Income benefits. The taxable maximum for a year is the maximum earnings subject to the Social Security tax. While payment calculation bases are used to set payments to providers of rehabilitation services.

Fast Facts

  • There will be no cost of living adjustment in 2010 and likely no adjustment in 2011. This phenomenon has not happened since these raises were first offered in 1974.
  • Approximately two-thirds of seniors rely on social security retirement benefits for at least half of their income and are now struggling to pay the bills in this uncertain economy.

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