No Social Security/Pension Cost of Living Adjustment Increase for 2016

On October 15, 2015 the Social Security administration formally announced that there will be no Cost of Living Adjustment for 2016.

No Cost of Living Adjustment

The Cost of Living Adjustment (COLA) for Social Security and most other pension plans is based on the Consumer Price Index (CPI). Recall this is part of what Janet Yellen and her friends at the latest Federal Open Market Committee (FOMC) said was too low for their comfort and was used as one reason they did not increase rates.

 

CPI 1 year trailing 9-2015

 

Here is a good graph of the components of CPI, by Bonddad

 

CPI Components CO bonddad 2012

 

Believe it or not, the long term average of CPI is 2.75% – We are no where near that today !

Have a Great Day!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

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