The Social Security Administration has announced within the last week or so that there will not be a a cost of living increase increase for Social Security and Supplemental Security Income recipients in 2016. So what does this mean exactly?
Well generally the cost of living for Americans increases every year due to inflation. Because of this, Social Security and SSI recipients usually get an increase each year in their monthly payments according to a formula created in the Social Security Act; however, this will not happen in 2016. The Wall Street Journal reports that despite there being an average increase of 4.1% each year since the formula was created in 1970, this is the third time since 2010 Social Security and SSI recipients will not receive an increase. It has also been widely reported that the main reason for this cost of living hold this year is due to dropping gas prices.
While this may be disheartening for many Americans who were hoping for a benefit increase next year, recipients should not be too discouraged. The fact that the cost of living has not increased means that a benefit increase was simply unnecessary to keep pace for 2016. Either way, despite the benefit staying where it is in this year, next year very well could see an increase in payments. It's hard to imagine our gas prices going much lower right?