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COLA: We Forecast Tiny Social Security Benefit Increase

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The American Institute for Economic Research is forecasting the smallest Social Security cost-of-living adjustment since that administration began automatic annual adjustments in the 1970s.

We are forecasting with 90 percent confidence that when the increase is announced on Oct. 18, it will be between 0.2 percent and 0.5 percent. Our senior research fellow Max Gulker released a short piece on this topic today, which is available on our Web site, free of charge.

An increase in this range would add between $2-6 to the average Social Security payment, Gulker writes. This is a small increase by historical standards: The average adjustment since 2000 has been 2.3 percent, or $28 per month at current average benefit levels. Last year there was no increase at all.

Gulker writes that the low or no increases of recent years reflect low inflation levels. He shows how a beneficiary can still come out ahead despite the sluggish increases in the “COLA.” The piece is available here.

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