Next Year’s COLA Increase In Jeopardy
With the American economy ravaged by the COVID-19 pandemic, along with a severe drop in gas prices since the beginning of this year, seniors on Social Security may find that the annual Cost of Living Adjustment (COLA) which increases their Social Security benefit may be a big disappointment next year. COLA increases are given automatically, but only when changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (known as the “CPI-W”) sufficiently changes from last year to this year. The COLA is determined by comparing the CPI-W for the third quarter of this year to the corresponding period last year and, provided there is a sufficient increase, a COLA increase is granted. This is essentially inflation protection built into the Social Security benefit program. But early projections are that the 2021 COLA may be about half as much as this year’s increase, or perhaps even less. This article by Christy Bieber appearing in the Winston-Salem Journal explains. Click here to read more.
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