Anticipating Social Security COLA 2019 – Where are we headed?

Note: For the Social Security COLA for 2020, click here.

Update 10/11/2018: The Social Security COLA for 2019 has been announced as a 2.8% increase.

It’s once again the time of year that we are anticipating information about the Social Security COLA (cost of living adjustment) for 2019. So, this is more of a “heads up” rather than a “super saving tip” you might say, for the over 60 million Social Security recipients in the US and even those who have relocated abroad.

Retirees and other SS recipients are trying to anticipate whether there will be a Social Security COLA 2019. Read on for my predictions.

As per usual, we already do have some clues as to where we are heading. Although the final decision for COLA for 2019 won’t be announced for another six weeks or so, here’s what I foresee as to what will happen. Brace yourself for it because it may not be good news. Good news is often hard to find when it comes to COLA and cost of living calculations.

Why is That?

For one key reason, if there is a big increase in the COLA, it essentially means that prices are going up, up, and up! Look, we already know for a fact that everything goes up in price as time passes on by, but when it jumps more than 2% in any one year (the level that our Federal Reserve Board deems the acceptable maximum), then you and I feel the pinch. If you are retired and relying on SS, you may feel it even more than others do.

I hate the term “fixed income” because we are all basically in that boat whether we are employed and work for a regular paycheck or we get one monthly from our government. That is the reason that having alternate streams of income is so important in addition to that weekly paycheck. Additional, variable sources of income offset the dependency on a single source of income, and fights inflation at any percentage. COLA adjustments are like getting a little bit of water when you may have months (or years) still ahead of you as you wander out in the desert! It helps, but it doesn’t help much.

If I Only Had a Dollar for Every Penny Inflation Has Stolen From Me

I currently have the highest income I have had in the past 20 years right now even though I am now retired. The problem is of course that the buying power of that income is not nearly as good as it was for me even when I earned about half as much 30 years ago.

I’m not going to cry the blues here. I shouldn’t and I am grateful I don’t have to do that. It is partly because I took advice and acted upon the fear of not having saved enough and prepared for my retirement back then. I have since made my way into the inflation war and returned successfully from it. Fortunately, I made the necessary adjustments I needed to make to live in a way where I still have safety and enjoyment despite inflation. COLA helps, but as I said before, I am still out here in the desert wandering and will be for some time yet.

Are You Prepared for What May Happen?

Looking at the CPI (Consumer Price Index) this past year, here’s what we see happening:

CPI-W Index Monthly % Change Monthly % Change Overall
Aug 2017 239.448 0.35%
Sep 2017 240.939 0.62%
Oct 2017 240.573 -0.15% 0.38%
Nov 2017 240.666 0.04% 0.42%
Dec 2017 240.526 -0.06% 0.36%
Jan 2018 241.919 0.58% 0.94%
Feb 2018 242.988 0.44% 1.39%
Mar 2018 243.463 0.20% 1.58%
Apr 2018 244.607 0.50% 2.06%
May 2018 245.770 0.50% 2.55%
Jun 2018 246.196 0.20% 2.72%
Jul 2018 246.155 0.00% 2.71%

We are heading towards a path of inflation closing in on 2% annually and that probably means a COLA adjustment of near that figure is on the way. As of last month, the increase in inflation for this year is 1.58%. While that is a trend, in the final analysis, that is not what determines the 2019 COLA increase.

If the average CPI-W reading goes up in 2018, then the difference, rounded to the nearest 0.1%, is what beneficiaries will receive as an increase in 2019. If this were to be announced today, the COLA would be calculated as an increase of 2.71% (adjusted to the nearest 1/10 of 1 percent = 2.7%) (It’s calculated this way: 246.155 – 239.448) / 239.448 x 100)

Does This Reflect Our Actual Cost of Living?

Because we don’t know what will happen in the rest of the year’s third quarter, we just can’t be certain of the COLA. There is a good chance there will be a COLA increase, but that amount will still depend on a variety of factors that we can’t see yet. Perhaps it will be something like the impact of hurricanes yet to come and affect our economy.

Inflation is led by the average 6.1% increase in senior-centric items like healthcare in particular. This is why many think we need a new a cost-of-living formula that reflects more accurately these conditions for those who are most dramatically affected by not getting a weekly paycheck.

In addition, we don’t know yet if there will be an increase in Medicare premiums. If there is, it may wipe out part or even all of the COLA.

I will be updating you in the next few weeks or as soon as news breaks on the amount of the Social Security 2019 COLA.

How much do you depend on a COLA to help you get by in your retirement or disability? Are any of your family receiving SS, SSDI, or other government program funding that may be seriously affected by these decisions? If not a factor today for you and yours, do you worry about SS and COLA in your future now?

Related posts:
Upcoming Improvements to Medicare Benefits for 2019
Social Security COLA for 2018: Is It All Good News?
Inflation is Merciless on Your Financial Future


  1. Ron Paquette

    Why get a COLA? It adds to inlation; it can be wiped out by an increase in our Medicare benefits; and then it increases our income which can increase our taxes. The Fed. Gov’t should eliminate COLA which would decrease or slow down our Debt. This would also decrease inflation. As a recipient we gain little if anything. We just add to the coffers of others, especially the Healthcare industry. It is time to stop the madness. Do away with COLA and the silly games we are forced to endure!

    1. Ron, I would agree that often the COLA increase is offset by a corresponding increase in Medicare costs. One could surmise that the cost of healthcare and the profits that are prioritized by the companies involved may be the real culprit in causing the inflation growth, particularly for seniors and other people with chronic illness. On the subject of taxation, I would just add two points. Most recipients of Social Security benefits pay little or no income taxes so it does not really have a significant effect on the income tax issue. Secondly, if you’re talking about government debt, keep in mind that Social Security benefits are not paid for by the government, but paid by the workers themselves. The government simply holds the funds and distributes them through the government agency. It doesn’t contribute to the national debt, unless you want to consider the administrative costs. I really appreciate your making an analysis; I’m just not quite sure I can agree with all of it.

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