Video: Social Security Not Getting Cost of Living Increase

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COLUMBUS, Miss. (WCBI) — People who receive Social Security will not be getting a cost of living increase next year.

The Social Security Administration says the decision was made based on consumer prices for things like gas being down.

This means if you receive the max amount in 2016 you will receive 24 dollars less a month than those who received the max this year — that adds up to almost 300 dollars less a year.

A budget is the key to success … That’s what financial planner Scott Ferguson wants you to know.

He says budgeting is extra important for people on a fixed income, because it can help you build that nest egg for emergencies.

“Very important that you have other resources you can turn to, instead of counting on something that may or may not happened year in to year out,” says Ferguson.

He says the best way to get started is by keeping track.

“Go through every expense that you have in a month, you can get it, get as technical as taking a notebook and writing down every size expense that you have a week,” Ferguson.

From there you will find places you can cut back.

“You’ll be surprised at just how many 2 and 3 dollars a day that you’re actually spending on things that you really don’t need, that you could really do without,” says Ferguson.

Ferguson says even those monthly expenses can normally be chopped down.

” All those monthly expenses that we have, typically, extras get added, if we can find a way to cut those extra, cut those added expenses, then you’ll be able to find a lot of room in your budget,” says Ferguson.

He suggests looking at cost like your cable and phone bill to start, and it’s never too early to start saving for tomorrow because a penny saved really can be a penny earned.

Here is a press release from the S.S. Administration:

Law Does Not Provide for a Social Security Cost-of-Living Adjustment for 2016

With consumer prices down over the past year, monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 65 million Americans will not automatically increase in 2016.

The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The period of consideration includes the third quarter of the last year a cost-of-living adjustment (COLA) was made to the third quarter of the current year. As determined by the Bureau of Labor Statistics, there was no increase in the CPI-W from the third quarter of 2014 to the third quarter of 2015. Therefore, under existing law, there can be no COLA in 2016.

Other adjustments that would normally take effect based on changes in the national average wage index also will not take effect in January 2016. Since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax, as well as the retirement earnings test exempt amounts. These amounts will remain unchanged in 2016. The attached fact sheet provides more information on 2016 Social Security and SSI changes.

The Department of Health and Human Services has not yet announced Medicare premium changes for 2016. Should there be an increase in the Medicare Part B premium, the law contains a “hold harmless” provision that protects approximately 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit. Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2016. In addition, beneficiaries who have their Medicare Part B premiums paid by state medical assistance programs will see no change in their Social Security benefit. The state will be required to pay any Medicare Part B premium increase.

Information about Medicare changes for 2016, when available, will be found at www.medicare.gov.

For additional information, please go to www.socialsecurity.gov/cola.