Inflation is rising, and while that puts a strain on monthly budgets, it could mean that Social Security recipients get rewarded with an increase next year. The Social Security Administration (SSA) won't decide on an increase until it compares this year's third-quarter inflation numbers to last year's numbers, but based on inflation data in the first quarter, recipients could end up getting a 2.56% bump in Social Security income in 2018.
How does the SSA decide?
The Social Security Administration determines whether or not to increase Social Security payments based on inflation data from the Bureau of Labor Statistics (BLS).
The BLS tracks the direction of prices for goods and services in the U.S., and while it uses various indexes to do this, the Social Security Administration uses the BLS' monthly consumer price index for urban wage earners and clerical workers (CPI-W) in its calculations.
Specifically, the Social Security Administration averages the monthly CPI-W figures reported by the BLS during the third quarter, and then it compares that average to the monthly average from the last third quarter that resulted in a cost of living adjustment (COLA) increase.
How does the SSA decide?
The Social Security Administration determines whether or not to increase Social Security payments based on inflation data from the Bureau of Labor Statistics (BLS).
The BLS tracks the direction of prices for goods and services in the U.S., and while it uses various indexes to do this, the Social Security Administration uses the BLS' monthly consumer price index for urban wage earners and clerical workers (CPI-W) in its calculations.
Specifically, the Social Security Administration averages the monthly CPI-W figures reported by the BLS during the third quarter, and then it compares that average to the monthly average from the last third quarter that resulted in a cost of living adjustment (COLA) increase.
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