Mark Tuesday, Oct. 16, as a key date for your financial planning.
Why? Because that is the date the all-important September Consumer Price Index for wage and clerical workers will be released, and this is the last piece of the puzzle that will determine the 2013 cost-of-living adjustment (or COLA) for Social Security retiree and disability recipients.
What should we expect? First, the formula: Next year's adjustment is based on the year-to-year percentage change for the entire third quarter of the CPI for wage and clerical workers. Last week saw July consumer prices increase by 1.3 percent. Thus, that leaves just August and September outstanding.
Looking into the crystal ball, examining last year’s month-to-month trends, and recognizing that gasoline prices have increased considerably in the past 30 days (or versus the July reading), and the prospects suggest a 2013 COLA in the range of 1-2 percent, or not too far from this week’s July reading.
Now, of course, for retirees, a key measure will also be if there is any increase in next year’s Medicare Part B premium, which could offset some (or, heaven forbid, all) of this plausible increase in one’s Social Security retiree payment.
In any event, it appears that 2012 monthly Social Security retiree payments (again, excluding Medicare Part B) should increase modestly next year.
Keith E. Forrest