No COLA Increase for Social Security in 2016

AARP's Florida state director, Jeff Johnson, issued the following statement on news that there would be no cost-of-living increase for Social Security beneficiaries for 2016:

"This is disappointing news for more than 4.2 million Floridians of all ages who now receive earned Social Security benefits, from more than a quarter million children of deceased or disabled workers to nearly 3 million retired workers. This is only the third time in more than 40 years that Social Security recipients will see no cost of living adjustment (COLA). "

"To make matters worse, 30 percent of Medicare beneficiaries will see their monthly Medicare Part B premium dramatically increase, and all Medicare beneficiaries will experience an increase in their Part B deductible."

By law, Social Security COLAS are calculated using the CPI-W consumer price index, which is based on prices for a market basket of products and services purchased by typical urban workers. Falling gas prices this year have offset increases in other costs in the CPI-W, leading to no COLA for Social Security recipients in 2016, Johnson noted.

"But Social Security recipients spend more of their monthly budget on health care, food and housing than do younger workers, and all three of those categories have experienced meaningful price increases over the past year. As a consequence, the CPI-W underestimates how Social Security beneficiaries experience inflation, and how much their benefits should in fact increase to maintain purchasing power."

"We encourage AARP members in Florida to contact their members of Congress to ask for a more accurate COLA formula reflecting the real impact of rising costs on those collecting their earned Social Security benefits."

"AARP also has called on Congress to protect those most vulnerable to Medicare premium increases from this double impact. We will continue to advocate for our members and all Floridians on this important issue."