SeniorJournal.com - Daily News & Information for Senior Citizens and Baby Boomers

Front Page        Search         Contact Us         Advertise in Senior Journal



Senior Journal: Today's News and Information for Senior Citizens & Baby Boomers

More Senior Citizen News and Information Than Any Other Source - SeniorJournal.com

SeniorJournal.com Paid Advertising   

AndroGel Testosterone Linked to Heart Attack & Stroke - Free Lawsuit Consultation - AndroGel Testosterone Lawsuit Center

Ovarian Cancer Linked to Talcum Powder - Free Lawsuit Consultation - Talcum Powder Lawsuit Center

• Go to more Social Security News or More Senior News on the Front Page

 
 

E-mail this page to a friend!

Social Security News

Largest Social Security COLA Increase in Over 25 Years May Greet Senior Citizens in 2009

Current trends indicate it will be over 6% and largest cost-of-living adjustment since 1982; announcement due next month

Sept. 15, 2008 – Senior citizens may be headed for their largest pay increase – or cost of living adjustment – in more than 25 years, following this year’s Social Security COLA of only 2.3 percent. Projections are now being made that the increase for 2009 will almost certainly exceed six percent.

History of Increases

 

Month

Year

% Ch.

 

January

2008

2.30%

 

January

2007

3.30%

 

January

2006

4.10%

 

January

2005

2.70%

 

January

2004

2.10%

 

January

2003

1.40%

 

January

2002

2.60%

 

January

2001

3.50%

 

January

2000

2.50%

 

January

1999

1.30%

 

January

1998

2.10%

 

January

1997

2.90%

 

January

1996

2.60%

 

January

1995

2.80%

 

January

1994

2.60%

 

January

1993

3.00%

 

January

1992

3.70%

 

January

1991

5.40%

 

January

1990

4.70%

 

January

1989

4.00%

 

January

1988

4.20%

 

January

1987

1.30%

 

January

1986

3.10%

 

January

1985

3.50%

 

January

1984

3.50%

 

July

1982

7.40%

 

July

1981

11.20%

 

July

1980

14.30%

 

July

1979

9.90%

 

July

1978

6.50%

 

July

1977

5.90%

 

July

1976

6.40%

 

July

1975

8.00%

 

The COLA for December 1999 was originally determined as 2.4 percent based on CPIs published by the Bureau of Labor Statistics. Pursuant to Public Law 106-554, however, this COLA shown for January 2000 is effectively now 2.5 percent.

 

This is not necessarily good news, since it reflects the rate of inflation for goods and services seniors have to buy, but is much better than no cost of living adjustment as in most private plans.

The COLA in 2008 was just 2.3 percent, the smallest since 1904. The Social Security Administration estimated it added $24 to the average retired senior citizen’s wallet each month. The projected increase for 2009 of over 6 percent indicates the average senior may get an extra $75 per month in 2009.

One of those who keeps a watch on the COLA is Mike Causey, who reports on Federal News Radio.

“Federal-military and Social Security retirees will get a cost of living adjustment in their January, 2009 checks. With one month (this month, September) left in the inflation-tracking countdown, the 2009 COLA pay is now on track to be 6.2 percent,” he says in his Sept. 10 report on Federal News Radio.

His projection, however, only reflects actual economic results for one of the three months that will determine the COLA for seniors. At the end of July the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) – the CPI index used to determine COLA for Social Security - was 6.2 percent higher than July of last year.

 

Related Stories

 
 

Social Security Financial Status Looks Better in Trustees Annual Report

Trust Funds exhausted in 2041 - the same as last year’s estimate

March 26, 2008

Proposed 2009 COLA Will Keep Five Million Seniors Below Poverty Says Senior League

2.8% increase will raise average benefit just $30.20 per month

Feb. 14, 2008

Senior Citizen Advocates Think Social Security Increase Not Much Help with Medicare Increases

Senior Citizen League says Medicare premiums going up five times faster that COLA

Oct. 17, 2007

Social Security Announces $24 Monthly Benefit Increase for Average Senior Citizen in 2008

Rate increase of 2.3% is smallest since 2004, follows Medicare Part B 3.1% premium increase

Oct. 17, 2007


Read more Social Security News

 

The CPI measures the average change in the prices paid for a market basket of goods and services. These items are purchased for consumption by the two groups covered by the index: All Urban Consumers (CPI-U) and Urban Wage Earners and Clerical Workers, (CPI-W).

The continued high price of gasoline almost assures the inflation index will stay high for August and September. The August numbers are expected to be released tomorrow by the Bureau of Labor Statistics.

And, even at the White House the numbers are changing to project a higher COLA that expected just a few months ago.

In late July, the White House issued the President’s Mid-Year Budget Review and added $47 billion to expected outlays for Social Security over the next five years.

 

Update to this story...

 
 

Social Security COLA for 2009 Still Heading Toward Six Percent Increase with New Data

Bureau of Labor Statistics says critical consumer price index jumped 5.9% in August

Sept. 16, 2008

 

The reports says one of the reasons for the increased projection is “higher projections for Cost of Living Adjustments (COLA).” Although, the report did not specifically say what the COLA increase was expected to be. They did, however, increase the projection made just in February for 2009 by $6.8 billion.

The official COLA announcement by the Social Security Administration is normally made shortly after the middle of October, when the CPI-W numbers for September are final.

The bump seniors get each year is based on the increase in the Bureau of Labor Statistics' CPI-W, from the third quarter of the prior year to the corresponding period of the current year. 

This year's increase in the CPI-W was looking small earlier this year but the recent inflation numbers are expected to make the third quarter gain substantial.

The problem is the increase is only aimed at keeping Social Security recipients at the same relative income level. So, no matter how high the pay raise seniors get, it may well be eaten up by inflation.

Seniors have actually been losing ground in recent years because of the gigantic increases in healthcare costs, which has been much higher than the average increase for the CPI-W. This year, however, recent reports indicate a substantial slowing in the rate of increase for healthcare costs.

Keep up with the latest news for senior citizens, baby boomers

Search for more about this topic on SeniorJournal.com

Google Web SeniorJournal.com

Click to More Senior News on the Front Page

Copyright: SeniorJournal.com

    

 

Published by New Tech Media - www.NewTechMedia.com

Other New Tech Media sites include CaroleSutherland.com, BethJanicek.com, SASeniors.com, DrugDanger.com, etc.