Retirees Beware: No Social Security Amid Increased Cost of Living

Millions of retirees will have to face bad news as no adjustments will be made to their cost-of-living checks in 2016, the government confirmed. This unwelcome news will also impact the benefit payments to retired federal and service members. This is the third time in 40 years, all of which are in Obama Administration, that social security payments have not been increased. This raise is corresponding to the CPI (Consumer Price Index). There are more than 60 Million people, including retired, disabled and children and spouses that collect social security benefits each month. The other 15 Million consist of disabled veterans, retirees, and their dependents/survivors that live on the social security benefits, reports Washington Post.

The retirees are especially worried as their Medicare payments will shoot up by 52%, says USA Today. The Cost of Living Adjustment is done as per the measurement of inflation. Since the gas prices are low, the overall consumer prices have gone down. Currently, the price of regular gasoline is $2.30 which is at least 90 cents less than what it used to be a year ago, as per Highlands Today.

The seniors that are living on fixed incomes are rather disappointed with the lack of COLA. They argue that the food prices have gone up, the housing is expensive and the money will become very tight after this news comes into effect, said a resident of retirement community in Atlanta. However, there is still some silver lining to the dark COLA cloud, especially for the high income employees. Since the social security is financed by 12.4% tax on income above $118,500 which is paid by the employer and the employee, partially, this year the wages that are subject to social security taxes will remain at $118,500 as there will be no COLA in 2016, reports ABC News.