Bad news on cost of living raises for Social Security

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BY MARK MILLER

Retirees are facing a double whammy next year: no inflation adjustment in their Social Security benefits and a whopping 52 percent jump in certain Medicare premiums.

The Medicare premium hikes will hit only 30 percent of beneficiaries: those who are not protected from a “hold-harmless” provision in federal law that prohibits any premium hike that produces a net reduction in Social Security benefits. But the increases suggest strongly that the recent trend of moderate healthcare inflation is ending.

SOCIAL SECURITY CHANGES

Final figures for 2016 will not be available until the fall, but the recent annual report of Social Security’s trustees projects that there will not be any cost-of-living adjustment (COLA) next year.

The COLA is determined by averaging together third-quarter inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Inflation has been flat due to collapsing oil prices.

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