No Social Security cost-of-living increase for 2016

In addition to the COLA freeze, many older Americans will be hit with a double whammy of a hefty increase in their Medicare Par B premiums tied to Social Security.

Housing is up 3.3 percent and food and beverages up 2.2 percent in Broward and Miami-Dade counties, the basis of the South Florida consumer index. For example, had a married couple – retired since 2009 and receiving about $2,330 per month received a more typical 3% COLA – their total Social Security income would be about $10,700 more than it has actually been since 20009.

Dropping fuel prices are the biggest reason retirees aren’t getting a raise.

Blame soft inflation, including the almost 30% drop in gas prices over the past year. However, the 1.45% Medicare portion of the payroll tax would continue to apply to all wages, and the 0.9% Medicare surtax would be added for workers with earnings over $200,000 for single filers and $250,000 for joint returns.

It all has to do with a legal provision that addresses cost-of-living adjustments for Social Security benefits, and the fact that the government announced Thursday that there won’t be an adjustment next year.

Most Social Security recipients have their Medicare Part B premiums for outpatient care deducted directly from their Social Security payments, and the annual cost-of-living increase is usually enough to cover any rise in premiums. Rothenburg has been on Social Security for two years.

This hike will impact four groups of people. Many people who get SSI also receive Social Security.

However, unprotected Medicare beneficiaries could face up to a 52 percent increase in their monthly Medicare premiums next year, from about $104 to $159, according to government projections. Ron Wyden of Oregon, have introduced legislation that would freeze Medicare’s Part B premium and deductible for 2016. “It is about basic fairness”.

Jason Furman, the chairman of President Obama’s Council of Economic Advisers, said recently that the lack of a cost-of-living adjustment resulted from a positive economic development: “The sharp decline in energy prices that is putting more money in families’ pockets” and contributing to the economic recovery.

According to the latest government data, as of a year ago there were 1,461,000 federal retirees drawing benefits from the older system.

Speak to a financial adviser and the Social Security Administration for various options that may be available to you so you can maximize your future Social Security payments. The period of consideration includes the third quarter of the last year a cost-of-living adjustment (COLA) was made to the third quarter of the current year. Today’s announcement that there will be no COLA increase next year means that they will struggle to pay for the increased cost of medical care, food and other basic necessities. If prices go up, so do benefits.