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Will You Get a Social Security Increase in 2018?

Will You Get a Social Security Increase in 2018?
April 25
10:52 2017

(Fool) – Inflation is rising, and while that puts a strain on monthly budgets, it could mean that Social Security recipients get rewarded with an increase next year. The Social Security Administration (SSA) won’t decide on an increase until it compares this year’s third-quarter inflation numbers to last year’s numbers, but based on inflation data in the first quarter, recipients could end up getting a 2.56% bump in Social Security income in 2018.

How does the SSA decide?
The Social Security Administration determines whether or not to increase Social Security payments based on inflation data from the Bureau of Labor Statistics (BLS).

The BLS tracks the direction of prices for goods and services in the U.S., and while it uses various indexes to do this, the Social Security Administration uses the BLS’ monthly consumer price index for urban wage earners and clerical workers (CPI-W) in its calculations.

Specifically, the Social Security Administration averages the monthly CPI-W figures reported by the BLS during the third quarter, and then it compares that average to the monthly average from the last third quarter that resulted in a cost of living adjustment (COLA) increase.

For example, CPI-W didn’t increase between the third quarter of 2014 and the third quarter of 2015, so there wasn’t a COLA increase in 2016. Since there wasn’t a COLA increase in 2016, but there was an increase in 2015, the Social Security Administration compared the third quarter of 2016 CPI-W figures to the third-quarter 2014 figures to determine whether or not a COLA increase was necessary in 2017.

https://www.fool.com/investing/2017/04/22/will-you-get-a-social-security-increase-in-2018.aspx

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