Reduced inflation means no Social Security COLA in 2011

Since Congress established the annual cost of living adjustment (COLA) for Social Security payments in 1975, only twice have Social Security payments actually failed to rise. Now the Associated Press suggests that there could be no Social Security COLA in 2011. Rising cost of living is too reduced, which makes the Social Security COLA inadvisable, said the Social Security Administration. Article resource – Low inflation means no Social Security COLA in 2011 by Personal Money Store.

Less Social Security COLA is what Congress is functioning on

Each year, those retired and disabled Americans on Social Security hope to get their annual COLA. You will find more than 58 million that want this. In reaction to what could be the second straight year without a raise in benefits across the board, the House of Representatives plans a November vote on a bill that would give each Social Security recipient $250. The AP explains the Senate is fairly opposed to the bill although House Speaker Nancy Pelosi hopes to get the bill via the House really quickly. This bill would make more individuals unhappy with the retired Americans within the country. They are a heave burden on America. Home values and savings continue to stay really low. Also, the recession has brought on the cost of living to go up although COLAs have stayed the same.

Based on retiree Betty Dizik who is 83, “We’re just a little bit upset because our bills are going up and our Social Security is not.” This is what the AP reports. The $1,200 a month Social Security check coming in for Dizik is her only source of income. And her situation is far from unique. The average Social Security check is $1,072 per month. The Social Security Administration also suggests that 64 percent of those who received Social Security compensation in 2008 depended upon it as their sole income.

The past Social Security COLA was a big one

Social Security is at the moment supported by a 6.2 percent payroll tax paid by workers and employers. The maximum wage cap for which the tax nevertheless applies is $106,800. The AP explains that January 2009 was the last Social Security COLA which had the largest boost in 27 years with a 5.8 percent boost. Energy prices increased a ton. That is what led to the COLA being so big.

Consumer prices have to rise above 2008 amounts before a COLA can occur for Social Security. The plan right now is that in 2011 the COLA can rise 1.2 percent to start in January 2012, based on the Social Security Administration.

Articles cited

Associated Press

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