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Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Cost of Living Allowance to Increase for Social Security Benefits

The Cost of Living Allowance calculated by Social Security is likely to go up in 2012, but the news isn't all good.

A Cost of Living Allowance hike may soon provide relief for retirees who have toughed out two years with no increase in Social Security benefits.

 Retirees - and other social security recipients – are likely to get an increase of as much as 3.5 percent in 2012, reports AARP, an advocacy group for older Americans. The Social Security Administration is expected to announce the specifics of the raise later this month, said AARP, but a higher Cost of Living Allowance is all but certain given higher prices for gas, food, services and other goods.

 Now, for the bad news. It’s likely that the increase in the Cost of Living Allowance will be offset by an increase in premiums paid by Medicare recipients, said AARP. Most often, these premiums are deducted from Social Security pay outs.

 The Social Security Administration bases its Cost of Living Allowance on the Consumer Price Index – a widely accepted measure of inflation reported monthly by the U.S. Bureau for Labor Statistics. COLA increases are calculated by comparing the current third-quarter CPI with the CPI for the third quarter of the previous year. 

Social Security recipients last received an increase in monthly benefits in 2008, said AARP, when rising energy prices pushed the COLA to 5.8 percent, leading to the highest increase since 1982.  

Meanwhile, the financial circumstances of many retirees have deteriorated. Though the costs of goods and services have remained essentially flat over the past two years, out-of-pocket costs for medical care rose significantly. These costs represent a disproportionate share of the living costs for older Americans.

 The economic strain is reflected in the relatively negative outlook retirees express about their financial situations. More than 31 percent of non-retired investors surveyed by Millionaire Corner in September feel they are better off today compared to one year ago, but only 20 percent of retirees share that opinion. 

About 25 percent of retirees feel they will be better off one year from now, but among the non-retired, more than 38 percent feel their financial situation will improve in the next 12 months. Retirees’ pessimism extends to their outlook for the next generation, as well. Fewer than 19 percent believe the next generation will be better off than the current one. The share increases to 23 percent for non-retired investors.

 Among other things, housing is becoming less affordable for Americans age 50 and older. A recent AARP report concluded the number of older adults devoting an “unsustainable amount” - 30 percent or more of their budget on housing - has grown in the past 10 years.