For only the third time in 40 years, there will be no cost of living (COLA) increase for Social Security beneficiaries receiving old age and retirement benefits and those receiving disability benefits. If you a receiving Social Security benefits, your monthly check will remain flat at least until 2017. Social Security COLAs are tied to the Consumer Price Index, which was essentially unchanged for the 12 months ending in September.
The lack of a COLA adjustment will be somewhat offset by no increase in Medicare Part B premiums for most Medicare beneficiaries. Federal law stipulates that if there is no COLA increase, then Medicare premiums cannot go up for those who have their Medicare premiums deducted from their Social Security checks. That means for about 70 percent of Medicare beneficiaries their Part B premiums will remain at $105 per month. The news is not so good for that other 30% who pay their Medicare Part B premiums out-of-pocket. At first they were forecast to get hit with a whopping increase of more than 50%. However, provisions included in the recent budget agreement hammered out between the White House and Congressional leaders reduced the impact of this increase to around 15%.