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Social Security Mailbox

Will There Be a COLA Rise in 2013?

All signs say yes, but it's likely to be smaller than this year's 3.6 percent

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En español | Q. Will there be a cost-of-living adjustment for Social Security benefits in 2013?

A. The Social Security Administration has predicted an increase of 1.8 percent, but we won't know the actual amount until October. That's when the key inflation statistic that sets the COLA, the Consumer Price Index rise for the July-September quarter, will be released.

To calculate the COLA, the government will compare that inflation figure with the figure for that quarter in 2011.

See also: We need to hear your thoughts on Social Security.

So right now it's a guessing game as economists try to predict what the October inflation figure will be. The Congressional Budget Office has predicted a COLA of 1.3 percent for 2013. Whatever the amount, it's going to be much smaller than the 3.6 percent rise that kicked in this year.

COLAs are designed to keep benefits in pace with inflation, so that buying power holds roughly steady. The rises are extremely important to more than 50 million Social Security recipients, many of whom live on fixed incomes.

This year, the average retired worker received a $43 a month increase in the monthly Social Security check. The same 3.6 percent COLA was paid to millions of military and government retirees.

Stan Hinden, a former columnist for the Washington Post, wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question for the Social Security Mailbox? Check out the archive. If you don't find your answer there, send a query.

You may also like: 10 ways to tune-up Social Security.

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Social Security expert Jonathan Peterson talks about his new book. Social Security for Dummies. Learn more about the book. Read

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