Cost of living adjustments or COLAs are necessary for the millions of individuals across the nation who survive on Social Security disability or retirement benefits or Supplemental Security Income.
What are COLAs? Goods and services cost money, but those prices are not fixed. They increase and it requires more money to maintain the same standard of living due to inflation. COLAs account for the inflation. For 2015, benefit paychecks will increase by 1.7 percent.
Yes, there is a 1.7 percent increase, but some financial analysts argue that it isn't enough. The increases have remained below 2 percent over the past several years. "There are specific things in the economy that go up way more than 1.7 percent," said one chief financial adviser, Nick Meriwether, with Financial Planning Center.
Some of these "specific things" are absolutely necessary for retirees and those who live with a disability. For instance, medical and health care. When it comes down to it, it adds up to approximately $20 per month extra for the average beneficiary. Around 58 million Americans will notice this increase in January.
Of course, the increases will also affect those who have not yet obtained or even applied for benefits. To help ensure that you have the best chance of meeting eligibility requirements it is best to consult with an SSD attorney. Even if your application has already been denied, you still have options.
Source: Investment News, "Social Security cost-of-living adjustment to rise less than 2% again in 2015," Liz Skinner, Oct. 22, 2014