2018 Social Security cost of living adjustment is 2 percent

The more than 70 million Americans who receive social security benefits will receive a 2% increase in their 2018 payments. Since the Consumer Price Index (CPI) increased two percent over the last 12 months, this will be the amount of the Cost of Living Increase (COLA).

While 2% does not seem like a lot of money, this is really the largest increase since 2012! We know that is hard to believe, but it is in fact true. This is what we would call a mixed blessing; yes this is the largest increase since 2012, but it is only 2 percent.

While each beneficiary will receive a different amount of money, the average 2018 social security payment will go up by $25 per month, or $300 per year. Some people will get less, some people will get more. The easiest way to determine your new 2018 payment will be to take the current amount you receive and multiply it by 1.02. That will be your new monthly payment.

The challenge is that inflation is an imprecise measurement. For example, it takes into account a wide basket of items and calculates the rate of inflation of those goods. It includes thousands of items ranging from rent, gasoline, clothing, to cell phone bills, etc. But some items are relied on more by senior citizens than others.

To expand on this, the cost of monthly cell phone costs are down double digit percentages from 2016 to 2017. That is great news, but unfortunately someone living on social security payments may not rely on a cell phone as much as a millennial.

Now take a look at prescription medications. Many senior citizens rely on one or more medications to deal with health care issues. The cost of drugs has increased over 10% year over year up through 2018, and this is something much more relevant to the elderly. When thinking about it that way, the 2% increase in payments for 2018 will not go very far…it only covers a small portion of the medication that is needed.

Who gets the 2 percent 2018 increase?

The total number of Americans impacted will be over 70 million. The vast majority are senior citizens. But there are also veterans, disabled people, workers that have retired from the federal government, and survivors of deceased parents/spouses. People of all backgrounds are therefore impacted by the two percent Cost of Living Increase.

Future of COLA

This will still be determined. There are many people (mostly conservatives) that say Cost of Living Increases are too high, that the country can’t afford the 2018 increase or really anyone. The argument is that the CPI rate overstates inflation. Or they say that the nation can’t continue to afford to make increases at the rate of inflation year over year, and that eventually social security will go broke.

Others, mostly liberals, say that social security does not pay enough. They argue that a 2% increase (such as that for 2018) is not enough, and senior citizens as well as others need more money to live off of.

Time will tell whether Cost of Living Increases (COLA) continue at the same rate and match inflation. As the years go on, the federal government, Congress, and others will need to make some hard decisions. Can the budget support COLA increases? Or is say a 2% increase too much to sustain. Time will tell. But no one who is now retired or who may think social security will be there for them should depend on it. As the program could very well go bankrupt, or the monthly payments could be drastically reduced.


  1. CL Jones

    When math does not add up. As a recipient of SSDI a two percent increase does not add up to $25. Considering base is $881 * .02 = 17.62 however they will retain $00.62 and increase possibly $17.00, while all other factors (inflationary) continue to rise.

    Just received notice water bill increased $90.46 monthly. Fuel is over $3.50 gal, Electric averages more than$200 month, Heating (natural gas) over 150 month in accordance with current billing practices. Mortgage remains same, auto insurance still high, though it was brought down with high deductible in place. The older one gets the more difficult it becomes to try and save a nickel.

    I would like to sell my home pay off all bills and rent for the remainder of my natural life.

    I could surely use help, however asking appears to be socially wrong and the government is unhappy still unless it gets at least 40% of every US dollar. It does not have enough respect for its voters or citizens to ask before giving away our tax dollars to foreign nations.

    No wonder we as Americans must live in Credit Card hell. Welcome to Alaska my friends.

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