COLA Increase Watch 2018

The Cost of Living Adjustment (COLA) won’t be announced until mid-October 2017 but it appears inflation is rising which could mean a COLA increase next year. The inflation measurement period is the 3rd quarter (July, August, and September) of 2017 so we won’t know for sure until then. However, a year over year comparison of the 1st quarter showed a 2.49% increase and every month this year has seen at least a 1.75% increase in the CPI-W, the inflation measurement used to determine the COLA increase.

According to the Trustees who oversee the social security program they project a 2.2% cost-of-living increase in 2018. A 2.2% increase would be about $30 a month. The Social Security increase will not be announced until mid-October 2017 when COLA (Cost of Living Adjustments) for the third quarter.

The 2017 COLA increase was announced on October 18, 2016.

Official COLA Measurement – CPI-W
2016 2017
July 234.771 TBD
August 234.904 TBD
September 235.495 TBD
Third quarter total 705.17 TBD
Average (rounded to the nearest 0.001) 235.057 TBD
Inflation According to the CPI-W 0.3% TBD

Last year the COLA increase was 0.3 percent cost-of-living adjustment which was about a $4 monthly benefit increase for the average retiree, or about $48 per year.

Quarterly CPI-W for 2016 thru May 2017
Year 2016 2017 YoY Increase
Quarter 1 231.414 237.329 2.49%
Quarter 2 234.388
Quarter 3 235.057
Quarter 4 235.446

A 2.49% CPI-W increase in the first quarter of 2017 is a positive sign towards a COLA increase in 2018.

Monthly CPI-W for 2016 thru May 2017
Month 2016 CPI-W 2017 CPI-W YoY Increase
January 231.061 236.854 2.45%
February 230.972 237.477 2.74%
March 232.209 237.656 2.29%
April 233.438 238.432 2.09%
May 234.436 238.609 1.75%
June 235.289
July 234.771
August 234.904
September 235.495
October 235.732
November 235.215
December 235.39

2018 Cola Effective & Payment Dates:

  • Retired military veterans, VA rates for compensation and pension for disabled veterans and surviving families will be effective December 1, 2017 and will be reflected on the first check to be paid on December 31, 2017.
  • Social Security benefits will be effective beginning with the December 2016 benefits, which are payable in January 2018.
  • Federal SSI payment levels will be effective for payments made for January 2018.

How COLA is Determined

The Cost-of-Living-Adjustments (aka Cost-of-Living Allowance) is determined by the Bureau of Labor Statistics’ Consumer Price Index (CPI-W).  It is based on the percentage increase of the CPI-W from the 3rd quarter of the previous year versus the current year’s 3rd quarter (July, August, and September).

Veterans who retire during the current calendar year will receive a temporary partial COLA due to already receiving a military pay raise in January.

  • The COLA increase is only set at the CPI-W if the increase is less than 2 percent.
  • If inflation is between to 2 to 3 percent than COLA is set at 2 percent.
  • If the CPI-W is greater than 3 percent than COLA is set at 1 percent below the CPI-W.
History of COLA (cost-of-adjustments) since 1975
Year COLA Year COLA Year COLA
2018 TBD 2003 1.40% 1988 4.20%
2017 0.30% 2002 2.60% 1987 1.30%
2016 0.00% 2001 3.50% 1986 3.10%
 2015 1.70% 2000 2.50% 1985 3.50%
2014 1.50% 1999 1.30% 1984 3.50%
2013 1.70% 1998 2.10% 1983 N/A
2012 3.60% 1997 2.90% 1982 7.40%
2011 0.00% 1996 2.60% 1981 11.20%
2010 0.00% 1995 2.80% 1980 14.30%
2009 5.80% 1994 2.60% 1979 9.90%
2008 2.30% 1993 3.00% 1978 6.50%
2007 3.30% 1992 3.70% 1977 5.90%
2006 4.10% 1991 5.40% 1976 6.40%
2005 2.70% 1990 4.70% 1975 8.00%
2004 2.10% 1989 4.00%

 

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