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2016 Social Security COLA
Cost-of-Living Adjustment (COLA) for 2016 Social Security Payments

   
==> Automatic Social Security COLAs by Year <==
 

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October 15, 2015: There will be no Cost of Living Adjustment to 2016 Social Security payments. 
  • Social Security payments will not go up next year because there was no increase in the Consumer Price Index (CPI-W) from the third quarter of 2014 to the third quarter of 2015.  Difference: CPI-W and CPI-U
  • The tax combined tax rate for Social Security and Medicare will be
    • 7.65% for employees.
    • 15.30% for those of us who are self-employed.
    • NOTE:  The 7.65% tax rate is the combined rate for Social Security and Medicare.  The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount.
    • The Medicare portion (HI) is 1.45% on all earnings.
    • Individuals with earned income above $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9% in Medicare taxes. The tax rates shown above do not include the 0.9% extra.
  • For those of us still working, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will remain the same at $118,500.
  • There is no maximum for the Medicare portion (HI) of the tax.
  • See below or click for Past COLAs by Year

Excerpt from my next newsletter with the CPI-U data
Inflation or Cost-of-Living Adjustment (COLA) for 2016 Social Security Payments

Automatic Social Security Cost-Of-Living Adjustments by Year:
 

July 1975 -- 8.0%
July 1976 -- 6.4%
July 1977 -- 5.9%
July 1978 -- 6.5%
July 1979 -- 9.9%
July 1980 -- 14.3%
July 1981 -- 11.2%
July 1982 -- 7.4%
January 1984 -- 3.5%
January 1985 -- 3.5%
January 1986 -- 3.1%
January 1987 -- 1.3%
January 1988 -- 4.2%
January 1989 -- 4.0%
January 1990 -- 4.7%
January 1991 -- 5.4%
January 1992 -- 3.7%
January 1993 -- 3.0%
January 1994 -- 2.6%
January 1995 -- 2.8%
January 1996 -- 2.6%
  January 1997 -- 2.9%
January 1998 -- 2.1%
January 1999 -- 1.3%
January 2000 -- 2.5%
January 2001 -- 3.5%
January 2002 -- 2.6%
January 2003 -- 1.4%
January 2004 -- 2.1%
January 2005 -- 2.7%
January 2006 -- 4.1%
January 2007 -- 3.3%
January 2008 -- 2.3%
January 2009 -- 5.8%
January 2010 -- 0.0%
January 2011 -- 0.0%
January 2012 -- 3.6%
January 2013 -- 1.7%
January 2014 -- 1.5%
January 2015 -- 1.7%
January 2016 -- 0.0%
Before 1975, Social Security benefit increases were set by legislation. 
CPI-U and CPI-WAs a result of budget cuts and because little difference was seen between the CPI-U and CPI-W measures during 1978–1980, the BLS discontinued the separate but overlapping samples of individual items and outlets maintained from 1978–1980 for the CPI-U and CPI-W. Because maintaining two independent samples was not sustainable, BLS economists track spending and prices by using the CPI-U sample of geographic areas, outlets, items, and prices. The CPI-W is then derived by adjusting the weights for various spending categories, reflecting that the spending habits of the wage earner population differ somewhat from the all urban consumer population.  For more, see Why does BLS provide both the CPI-W and CPI-U?

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