Each year our federal government accesses the inflationary environment and makes a determination for those on Social Security as to how much, if any, of an inflationary adjustment is needed…. AKA Cola adjustment-
COLA Adjustment – Cost of Living Adjustment
Looking into 2019, those on fixed incomes with COLA or Cost of Living Adjustments, in MOST cases will see a 2.8% increase per the Social Security Administration and their flagship marker, the CPI or consumer price index…
This includes in most cases pension, and other fixed income types, as they usually (we have just run across a disconnect, but are not to the bottom of it yet) follow the same index – good for all.
Here is the last decade of adjustments from the Social Security Administration
Social Security Tax Maximum
Ok – so the good news for those receiving fixed income could be looked at as a minor detractor for those paying the new higher Social Security Tax amount – but hey, we are all in this together –
Here is the new Social Security Tax Maximum amount with a little historical perspective for your perusal:
In 2019, the new tax maximum (said another way- the amount of money you need to earn to max your Social Security Benefit) is $132,900!
Have a great “Social Security COLA” Day!
John A. Kvale CFA, CFP