Tag Archives: Cola

YEAA – Social Security Benefit Increase 2.8% – Most other Pensions to Follow too

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

2019 Cola SS

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:

2019 SS Tax max and 10 year history

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

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

Social Security Raise in 2018 is 2% NICE!

The Social Security Administration announced late last week the COLA (Cost of living adjustment) based not he CPI, Consumer Price Index (see graph below) would be a 2% increase.

Here is a great fact sheet link

Three Important Numbers

2% – The increase in ALL Social Security benefits for 2018

$128,700 – The phase out level of Social Security withholdings – Medicare 3% does not phase out anymore

$17,040 – The maximum amount of employment related income you can earn AND draw Social Security early without facing a dollar for dollar tax above this amount

The CPI – Consumer Price Index

The Consumer Price Index (CPI) (to be exact, it is the CPI-W for clerical workers and wage earners- it looks exactly the same) is the basic index living adjustments for Social Security (and many other instruments) are used.

img_0937

As you can see the line is generally up, but there are years that no adjustment is made!

Happy 2% raise next year!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

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