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Not Much Good News (Yet) Concerning the 2017 COLA for Social Security

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The recent story in the news was such a non-event, you may have missed it. The Social Security Administration just released its projected cost-of-living adjustment, or COLA, that will theoretically affect Social Security payments in 2017. Last year, due largely to a drop in gas and oil prices, those on Social Security received a zero COLA – no adjustment at all. This year, even though we’ve just entered the third quarter of 2016, Social Security officials are out with their projections based on current consumer prices. The big prediction: benefits will go up by 0.2 percent. For the average recipient, that’s a whopping $2.69 more per month, about the cost of a gallon of regular at the pump.

Here’s an article with some good technical data about this development from the financial website The Motley Fool. For a slightly more down-to-earth take on this story you can

click here to see what the popular newspaper USA Today has to say.

Anything that affects Social Security impacts a huge number of Americans – some 60 million at last count, two-thirds of whom are retired. As The Motley Fool puts it, the annual cost-of-living adjustment is “among the most closely-watched Social Security figures.”  Under current laws, Social Security payments don’t get reduced if consumer costs go down, but they also don’t go up if the gauge used by Social Security administrators remains constant. And therein, says The Motley Fool, lies the problem.

Without going into too much detail, the Social Security COLA is based on what’s called the CPI-W, or Consumer Price Index for Urban Wage Earners and Clerical Workers. But many senior advocates, not to mention retirees themselves, argue that the CPI-W is the wrong gauge to use. Instead they advocate switching to the CPI-E, or Consumer Price Index for the Elderly, which “takes into account the spending habits of adults age 62 and over,” says The Motley Fool. Seniors, for example, spend twice as much as urban wage earners on medical care, and healthcare inflation continues to skyrocket, leaving seniors with less and less purchasing power. Seniors also drive less, so they derive less benefit from lower gas prices. The bottom line is that most seniors are suffering in their bottom line! The article in USA Today says seniors have lost nearly a fourth of their buying power in the past decade and a half. Clearly a tiny cost-of-living adjustment isn’t going to help very much.

Both articles we’ve linked you to have suggestions on how to deal with the drop in purchasing power being faced by today’s seniors. USA Today suggests some basic ideas on reducing spending and boosting income. The Motley Fool piece has a somewhat more technical approach. But in both cases planning is the key. Sitting back and relying too much on Social Security alone can be a costly mistake.

Helping retirees (and future retirees) plan for a secure and fruitful future is our passion here at AgingOptions. We love the process of walking our clients through the details of what we call LifePlanning. What makes a LifePlan different from all other retirement plans? A LifePlan is truly comprehensive and inclusive. Too many so-called retirement plans only deal with the financial aspects of retirement, and they often do a poor job of that. At AgingOptions our LifePlanning approach helps you maintain financial security, plan for your medical needs, make informed housing choices, ensure that your legal affairs are in order, and guarantee that your loved ones are well informed of your wishes. By following a LifePlan, your assets are protected, and your retirement dreams secure.

If this sounds like the plan you’ve been searching for, then take a simple next step: register now to attend a LifePlanning Seminar at a location near you. These lively seminars are completely free and absolutely without obligation. To register, click on the Upcoming Events tab, or contact our office. We’ll look forward to working with you to plan your retirement future.

(originally reported at and

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