2014 COLA Announcement Delayed / Estimated to be ~1.5%
As a result of the government shutdown, the Social Security Administration has delayed their announcement of the 2014 Cost of Living Adjustment (COLA). The figure was scheduled to be announced Wednesday, Oct. 16, but due to missing the Labor Department’s September 2013 inflation report as a result of the government shutdown, that date has been delayed indefinitely.
To calculate the COLA, consumer prices for the months of July, August, and September are compared to the previous year to see if prices have gone up. So far, based on the inflation reports made available for July and August, average prices were 1.4 percent higher than they were last year. The Associated Press is reporting that:
“Several economists said there were no dramatic price swings in September to significantly increase or decrease the projected COLA. That means the projection shouldn't change by more than a few tenths of a percentage point, if at all.”
Additionally, the article mentioned:
“Polina Vlasenko, a research fellow at the American Institute for Economic Research, projects the COLA will be between 1.4 percent and 1.6 percent. Her projection is similar to those done by others, including AARP, which estimates the COLA will be between 1.5 percent and 1.7 percent. The Senior Citizens League estimates it will be about 1.5 percent.”
Barring a September inflation report contrary to the one expected from the experts, an approximate 1.5 percent COLA would be one of the smallest adjustments since the program was adopted in 1975, and it would become only seventh time that a COLA has been less than two percent. Note, the COLA for 2013 equaled 1.7 percent.
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