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2016 Probably Means No COLA

September 14, 2015

If you read my last post, you’d think I can’t get enough of the 2015 Trustees Report, the annual look at current and projected finances for Social Security and Medicare. But believe me, there is important information there about what being a retired American could mean in years to come.


For instance, there will probably be no cost of living adjustment (COLA) in 2016, primarily due to zero inflation. So no benefit increases are on the horizon, even though things do actually cost more, regardless of what the inflation calculations say.


At the same time, Medicare trustees are expecting Part B premiums to jump. Currently, the lowest premium is $104.90 per month, which is what most seniors pay. Trustee projections have that jumping to $120.70 per month.


Obviously that’s quite a jump, but the fine print makes the situation even more interesting.

See, the 70% of enrollees who have these premiums deducted directly from their Social Security benefits have a “hold harmless provision” that prevents their checks from going down if their Medicare premiums are deducted from there. That means those proposed premium increases won’t affect them.


Who will pay? The other 30% will shoulder the burden, and it won’t be cheap (estimated monthly premiums are $159.30).


Make sure to have your Medicare Part B premiums deducted from your Social Security benefits! To sum it up, we’ve got stagnant benefit levels and rising costs, especially for some beneficiaries. This is not a recipe for financial success.

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This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.

Andrew Wood, Dan Simon and Alison Slezak are Investment Advisor Representatives. Advisory services are offered through CoreCap Advisors, LLC., a Registered Investment Advisor. CoreCap Advisors, LLC and Daniel A. White & Associates, LLC are separate & unaffiliated entities. 

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