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Provisions Affecting Cost-of-Living Adjustment
Information on the annual cost-of-living adjustment (COLA)

An annual cost-of-living adjustment (COLA) applies to benefits after initial eligibility. We provide a summary list of all options in this category. For each provision listed below, we provide an estimate of the financial effect on the OASDI program over the long-range period (the next 75 years) and for the 75th year. In addition, we provide graphs and detailed single year tables. We base all estimates on the intermediate assumptions described in the 2011 Trustees Report.

Choose the type of estimates (summary or detailed) from the list of provisions.

Number Table and graph selection
A1 Starting December 2012, reduce the annual COLA by 1 percentage point.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A2 Starting December 2012, reduce the annual COLA by 0.5 percentage point.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A3 Starting December 2012, compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). We estimate this new computation will reduce the annual COLA by about 0.3 percentage point, on average.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memoranda containing this or a similar provision:
A4 Starting December 2014, compute the COLA using a chained version of the consumer price index for wage and salary workers (CPI-W). We estimate this new computation will reduce the annual COLA by about 0.3 percentage point, on average. The new COLA will not apply to DI benefits. It will apply to OASI benefits, except for those of formerly disabled workers who converted to retired worker status.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A5 Starting December 2012, add 1 percentage point to the annual COLA for beneficiaries who have lived past a "specified age". The "specified age" is the sum of: (1) 65 and (2) the unisex cohort life expectancy at age 65.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:
A6 Starting December 2013, compute the COLA using the Consumer Price Index for the Elderly (CPI-E). We estimate this new computation will increase the annual COLA by about 0.2 percentage point, on average.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memoranda containing this or a similar provision:
A7 Starting December 2012, reduce the annual COLA by 1 percentage point, but not to less than zero. In cases where the unreduced COLA is less than 1 percentage point, do not carry over the unused reduction into future years.
Summary measures and graphs   (PDF version)
Detailed single year tables   (PDF version)
Memorandum containing this or a similar provision:

Above provisions
Summary measures
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Last reviewed or modified March 29, 2012