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Provisions Affecting Cost of Living Adjustment

Information on the annual cost-of-living adjustment (COLA)

An annual cost-of-living adjustment (COLA) applies to benefits after initial eligibility. We provide a summary list of all options (printer-friendly PDF version - coming soon) in this category. For each provision listed below, we provide an estimate of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, we provide graphs and detailed single year tables. We base all estimates on the intermediate assumptions described in the 2017 Trustees Report.

Choose the type of estimates (summary or detailed) from the list of provisions.

Number Table and graph selection
A1 Starting December 2018, reduce the annual COLA by 1 percentage point.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A2 Starting December 2018, reduce the annual COLA by 0.5 percentage point.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A3 Starting December 2018, compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). We estimate this new computation will reduce the annual COLA by about 0.3 percentage point, on average.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memoranda containing this or a similar provision:
A4 Starting December 2020, compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). We estimate this new computation will reduce the annual COLA by about 0.3 percentage point, on average. The new COLA will not apply to DI benefits. It will apply to OASI benefits, except for those of formerly disabled-workers who converted to retired-worker status.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A5 Starting December 2018, add 1 percentage point to the annual COLA for beneficiaries who have lived past a "specified age". The "specified age" is the sum of: (1) 65 and (2) the unisex cohort life expectancy at age 65.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A6 Starting December 2019, compute the COLA using the Consumer Price Index for the Elderly (CPI-E). We estimate this new computation will increase the annual COLA by about 0.2 percentage point, on average.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memoranda containing this or a similar provision:
A7 Starting December 2018, reduce the annual COLA by 1 percentage point, but not to less than zero. In cases where the unreduced COLA is less than 1 percentage point, do not carry over the unused reduction into future years.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A8 Starting December 2018, for OASI beneficiaries only (DI beneficiaries would only be affected when their benefit converts to OASI at NRA), the annual COLA would be based on the chain-weighted version of the CPI-U.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A9 For single/head-of-household/married-filing-separate taxpayers with modified adjusted gross income (MAGI) below $87,200 and for joint filers with MAGI below $174,400 for December 2019 ($85,000 and $170,000 multiplied by estimated CPI-U for 2019), use the chain-weighted version of the Consumer Price Index for All Urban Consumers (C-CPI-U) to calculate the cost-of-living adjustment (COLA), beginning with the December 2019 COLA. For those beneficiaries whose MAGI is above these thresholds, provide no COLA. Use prior tax year income data for this determination. Index the eligibility income threshold amounts to the CPI-U after December 2019.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:

Above provisions
Summary measures
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