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2018 cost of living adjustment shortchanges America’s retirees

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What’s been hailed as the largest Social Security cost-of-living adjustment (COLA) in five years doesn’t go very far in the real world where retirees live. The 2.0 percent boost in COLAs for 2018 amounts to only $27 a month for the average retiree — barely enough for a prescription co-pay, a tank of gas, or a bag of groceries.

What’s more, average beneficiaries will see their COLAs almost completely wiped out by rising Medicare Part B premiums. Those premiums will likely go up by $25 per month in 2018, making the math pretty simple. Many retirees will net only $2 extra per month, which might buy a cup of coffee but not much else. 

{mosads}In 2018, the average Social Security benefit will be about $1,400 a month. That’s hardly a lavish amount considering that almost two thirds of seniors depend on Social Security for at least half of their income, and one-third rely on it for at least 90 percent of their income.


Retirees anxiously await this time of year to find out how much their COLAs will be. Unfortunately, the cumulative nature of COLAs makes it harder for seniors to keep their heads above water financially. When COLAs fail to keep up with retirees’ true cost of living, there is a compounding effect from year to year. Here are COLAs for the past eight years:

2017 0.3 percent

2016 0.0 percent

2015 1.7 percent

2014 1.5 percent

2013 1.7 percent

2012 3.6 percent

2011 0.0 percent

2010 0.0 percent

These COLAs simply haven’t kept pace with seniors’ true cost of living. Currently, COLAs are calculated using the Consumer Price Index for Urban Wage Earners (CPI-W). But retirees’ expenses aren’t the same as for those wage earners. Simply put, seniors spend more of their income on housing and medical care, for example, than younger Americans do. But there is a fix for this discrepancy.

We support legislation Protecting Access to Primary Care Act sponsored by Rep. Rick Nolan (D-Minn.), which would tie Social Security COLAs to a different inflation indicator, the Consumer Price Index for the Elderly or CPI-E. The CPI-E more accurately reflects the rising prices that seniors pay for goods and services. COLAs calculated using the CPI-E would usually be more generous than the current method. 

To help retirees make up lost financial ground, Rep. Nolan’s bill also includes a one-time, emergency payout equal to a 3.9 percent cost-of-living increase. Anyone living on a fixed income understands how much difference even a percentage-point difference can make. 

Unfortunately, the majority party in Congress, led by Speaker Paul Ryan in the House, have so far ignored this legislation – preferring instead to push for the privatization of Medicare and the looting of Medicaid. Meanwhile, some 100,000 seniors in his home district struggle to survive on an average monthly Social Security benefit of $1360 per month.

That’s less than minimum wage. Republicans have instead introduced legislation that would raise the Social Security retirement age to 69 (a benefit cut) and reduce COLAs. That is a huge step in the wrong direction. Until Congress acts to more accurately calculate retirees’ cost-of-living adjustments, they will not be able to keep pace with the rising costs of aging.

Max Richtman is president and CEO of the National Committee to Preserve Social Security and Medicare, a membership organization which promotes the financial security, health, and well being of current and future generations of maturing Americans.

Tags Americans cost of living Paul Ryan

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