COLA stands for Cost of Living Increase, and is critical for those who rely primarily on social security.  Expenses continue to rise and the COLA is not intended as an increase in benefits per se, but rather to keep pace with rising costs.

The social security administration approved a .3% increase on October 18, 2016, it is nearly that time again.  The 2017 OASDI Trustees Report predicted that the 2018 COLA increase would be .2% and likely some sort of increase every year for the next 10 years or so.  We will find out next month when the SSA announces their increase.

The Social Security Act determines the specific formula for determining COLA.  They are based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W.)   There is a movement to change the index, as the CPI-W takes public transportation, cost of clothing and childcare into consideration, expenses which may or may not apply to our retired seniors.