Provisions Affecting Cost-of-Living Adjustment
An annual cost-of-living adjustment (COLA) applies to benefits after initial eligibility. We provide a summary list of all options (printer-friendly PDF version) 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 2021 Trustees Report.
Choose the type of estimates (summary or detailed) from the list of provisions.
| Number | Table and graph selection |
|---|---|
| A1 |
Starting December 2022, 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 2022, 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 2022, 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 2024, 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 2022, 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 2023, 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 2022, 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: |
| A8 |
Starting December 2022, for OASI beneficiaries only (DI beneficiaries would only be
affected when their benefit converts to OASI at NRA), the annual COLA would be based
on the chain-weighted version of the CPI-U.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memoranda containing this or a similar provision: |
| A9 |
For single/head-of-household/married-filing-separate taxpayers with modified adjusted
gross income (MAGI) below $94,500 and for joint filers with MAGI below $189,000 for December
2023 ($85,000 and $170,000 multiplied by estimated CPI-U for 2018-2023), use the chain-weighted
version of the Consumer Price Index for All Urban Consumers (C-CPI-U) to calculate the
cost-of-living adjustment (COLA), beginning with the December 2023 COLA. For those beneficiaries
whose MAGI is above these thresholds, provide no COLA. Use prior tax year income data
for this determination. Index the eligibility income threshold amounts to the CPI-U
after December 2023.
Summary measures and graphs
(PDF version)
Detailed single year tables (PDF version) Memorandum containing this or a similar provision: |