For people living on Social Security, 2016 will not be very happy as for the third time in a decade, there will be no COLA, or cost-of-living adjustment. The reasons behind the decision, announced by the Labor Department, include a drop in prices of gas by about 30 percent in addition to low inflation.
The cost of living is affected by inflation because the amount of money paid as Social Security is adjusted each year to take into account the rate of inflation. This is the cost of living adjustment, or COLA, reports CNN Money.
Annually, approximately 56 million Americans receive Social Security, with the average monthly Social Security check being $1,224. An additional eight million people, mainly the poor and disabled, are eligible for a benefit called Supplemental Security Income, reports the Wall Street Journal.
"In this economy, nothing is really guaranteed anymore. You find ways to cut corners: cut back on travel, your entertainment, going out to eat," said June Bretzin, 75, of Cuyahoga Falls, Ohio, according to the Wall Street Journal, who has looked around for part-time work all of last year, while taking home $9.10 an hour doing payroll for a nonprofit group, as a temporary job. She feels that living only on her Social Security check would have been tough, if she did not have her supplementary income.
But the lack of COLA is not the only concern for senior citizens. What is more troubling is the fact that many Social Security beneficiaries face the prospect of higher Medicare premiums, reports the Christian Science Monitor.
Thanks to a measure termed as the "hold harmless" provision, about 70 percent to beneficiaries will continue to pay the current monthly rate of $104.90 in Medicare premiums. But the balance 30 percent, including new Medicare members could see increases.
