Social Security

Don’t expect much in the way of a COLA for Social Security in 2014

2013

The annual Social Security COLA is determined by comparing the average CPI-W for the third quarter of the previous year with the current year for the same quarter (July, August and September).

The average CPI-W for the third quarter of 2012 was 226.936. That is the base for any 2014 Social Security increase.

Obviously we don’t know what the number will be for the 3rd quarter of 2013. However, here is the monthly CPI-W to date.

    January 2013: 226.520

    February 2013: 228.677

Using the February number as a benchmark, the increase for 2014 would be about 3/4 of one percent.

As long as inflation remains low, so will any Social Security COLA.

Update 4-16-13 9:00 AM. CPI-W for March 229.323

Update 5-16-13 CPI-W for April 228.949

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3 replies »

    • That simply is not true. The COLA is based on changes in the CPI-W which is the consumer price index for urban wage earners of many things we buy and pay for.

    • Here is what the CPI includes:

      The CPI measures the average change over time in the prices paid by urban consumers for a representative selection of consumer goods and services. The selection of goods and services (commonly referred to as the “market basket”) is based upon actual consumer purchasing patterns, which are determined from a survey of consumer expenditures. Goods and services in the market basket are weighted according to the share they constitute of total consumer spending. The major expenditure categories are:

      Food and beverages
      Housing
      Apparel
      Transportation
      Medical care
      Recreation
      Education and communication
      Other goods and services

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