Social Security COLAs to Rise; Formula Needs Improvement
Social Security beneficiaries will receive a much-needed, 2.8% cost-of-living adjustment (COLA) for 2019 – providing a $39 bump to the average monthly retirement benefit. The 2019 COLA is higher than 2018’s (2.0%), which was partially offset by an increase in Medicare Part B premiums for many beneficiaries. With Medicare Part B premiums anticipated to rise minimally for most beneficiaries next year, most Social Security recipients will be able to keep the lion’s share of the cost-of-living increase.
“This COLA is good news for seniors living on fixed incomes. Every extra dollar helps. But the current COLA formula (the CPI-W) is inadequate because it does not account for seniors’ rising expenses – especially housing and health care. COLAs could be improved by adopting the Consumer Price Index for the Elderly (CPI-E), which is based on retirees’ actual spending habits rather than those of the general population,” – Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare.
There is legislation in Congress, including Rep. John Larson’s Social Security 2100 Act and Rep. John Garamendi’s CPI-E Act of 2017, which would require the use of the Consumer Price Index for the Elderly to determine COLAs for a broad array of federal retirement programs, including Social Security. November’s elections may breathe new life into these bills after languishing under the current Congressional leadership.