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  • Cost of Living Allowance COLA

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    Tbird

    cola-current-historical-cost-of-living.png

    VA's COLA is always the same as SSA's COLA.

    The maximum amount of earnings subject to Social Security tax (taxable maximum) will increase to $168,600.

    The earnings limit for workers who are younger than the “full” retirement age will increase to $22,320. (We deduct $1 from benefits for each $2 earned over $22,320.)

    The earnings limit for people reaching their “full” retirement age in 2024 will increase to $59,520. (We deduct $1 from benefits for each $3 earned over $59,520 until the month the worker turns “full” retirement age.)

    There is no limit on earnings for workers who are “full” retirement age or older for the entire year.

    ssa-full-retirement-age-as-of-2024.png

    Medicare Information

    Information about Medicare changes will be available at www.medicare.gov. For Social Security beneficiaries receiving Medicare, their New Year benefit amount will be available in December through the mailed COLA notice and my Social Security’s Message Center.

    Your COLA Notice

    In December, Social Security COLA notices will be available online to most beneficiaries in the Message Center of their My Social Security account.

    This is a secure, convenient way to receive COLA notices online and save the message for later. You can also opt out of receiving notices by mail that are available online. Be sure to choose your preferred way to receive courtesy notifications so you won’t miss your secure, convenient online COLA notice.

    Remember, SSA services are free of charge. No government agency or reputable company will solicit your personal information or request advanced fees for services through wire transfers or gift cards. Avoid falling victim to fraudulent calls and internet “phishing” schemes by not revealing personal information, selecting malicious links, or opening malicious attachments. You can learn more about how SSA protects your personal information and my Social Security account.

    What Is The Cost of Living Allowance (COLA)?

    Social Security benefits, Supplemental Security Income (SSI), and VA Disability Compensation payments are adjusted to reflect any increase in the Cost of Living as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Bureau of Labor Statistics (BLS) prepares this index. The cost-of-living adjustment (COLA) aims to ensure that inflation does not erode the purchasing power of Social Security benefits, SSI payments, and VA Disability Compensation.

    The COLA is determined on a yearly basis. The average CPI-W for the third calendar quarter of the most recent year a COLA was determined and compared to the average CPI-W for the third calendar quarter of the current year. Any resulting percentage increase matches the percentage by which Social Security and VA benefits beginning in December of the current year will be increased. SSI payments increased by the same percentage the following month (January). If the increase in the CPI-W is at least 0.1 percent, there will be a COLA. However, if the CPI-W increases by less than 0.05 percent or decreases, there won’t be a COLA.
     
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    Cost of Living (COLA) Allowance History

    Congress enacted the COLA provision as part of the 1972 Social Security Amendments. Before that, increases in your benefits had to be enacted by Congress. At that time, inflation was relatively high. As such, the provision enacted in 1972 provided an automatic COLA only if the increase in the CPI-W was at least 3%. This is called the “three-percent trigger.” By the mid-1980s, as inflation began to decline, the possibility arose that no annual COLA would be authorized. The CPI-W didn’t rise enough to meet the three-percent trigger. In 1986, Congress enacted legislation to eliminate the “three-percent trigger.”

    Other Automatic Increases

    SSA's program has other automatic increases based on increases in the national average wage index and is triggered only if there is a COLA for Social Security benefits. These increases are:

    The contribution and benefit base — the cap on wages and self-employment income subject to Social Security payroll tax.

    Retirement earnings test exempt amounts are caps on the amount of earnings that a beneficiary can earn before a reduction in benefits applies.

    Effect on Medicare Part B Premium

    Unlike the Social Security COLA, the CPI-W plays no part in the computation of the Medicare Part B premium. The Medicare Part B premium changes each year, if necessary, so that the Part B premium is sufficient to fund approximately 25% of the projected cost of the Part B program. Any such premium change is effective in January.

    Information about Medicare changes is available at Medicare.gov.

    Historical Cost of Living Allowances

    The 1975-82 COLAs were effective with Social Security benefits payable for June (received by beneficiaries in July) each year. After 1982, COLAs have been effective, with benefits payable for December (received by beneficiaries in January).

    Automatic Cost-Of-Living Adjustments received since 1975

    • July 1975 — 8.0%
    •  July 1976 — 6.4%
    •  July 1977 — 5.9%
    •  July 1978 — 6.5%
    •  July 1979 — 9.9%
    •  July 1980 — 14.3%
    •  July 1981 — 11.2%
    •  July 1982 — 7.4%
    •  January 1984 — 3.5%
    •  January 1985 — 3.5%
    •  January 1986 — 3.1%
    •  January 1987 — 1.3%
    •  January 1988 — 4.2%
    •  January 1989 — 4.0%
    •  January 1990 — 4.7%
    •  January 1991 — 5.4%
    •  January 1992 — 3.7%
    •  January 1993 — 3.0%
    •  January 1994 — 2.6%
    •  January 1995 — 2.8%
    •  January 1996 — 2.6%
    •  January 1997 — 2.9%
    •  January 1998 — 2.1%
    •  January 1999 — 1.3%
    •  January 2000 — 2.5% [1]
    •  January 2001 — 3.5%
    •  January 2002 — 2.6%
    •  January 2003 — 1.4%
    •  January 2004 — 2.1%
    •  January 2005 — 2.7%
    •  January 2006 — 4.1%
    •  January 2007 — 3.3%
    •  January 2008 — 2.3%
    •  January 2009 — 5.8%
    •  January 2010 — 0.0%
    •  January 2011 — 0.0%
    •  January 2012 — 3.6%
    •  January 2013 — 1.7%
    •  January 2014 — 1.5%
    •  January 2015 — 1.7%
    •  January 2016 — 0.0%
    •  January 2017 — 0.3%
    •  January 2018 — 2.0%
    •  January 2019 — 2.8%
    •  January 2020 — 1.6%
    •  January 2021 — 1.3%
    •  January 2022 — 5.9%
    • January 2023 — 8.7%
    • January 2024 — 3.2%

    (1) The COLA for December 1999 was initially determined as 2.4 percent based on CPIs published by the Bureau of Labor Statistics. Public Law 106-554 states that this COLA is now 2.5 percent.


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