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Wed Oct 10, 2012, 04:27 PM

The UnCOLA: Social Security Recipients To Get Puny Cost-Of-Living Boost (1.5% to 1.7%) In 2013 [View all]

By Mary Beth Franklin

October 9, 2012 4:11 pm ET

Social Security recipients will receive a cost-of-living increase for 2013, but it will be only about half as large as the COLA they received this year, according to an unofficial estimate by the American Institute for Economic Research, an independent economic research in Great Barrington, Mass.

AIER economists estimate the 2013 increase to be between 1.5% and 1.7%, two percentage points below the 3.6 % increase seniors received for 2012.

The Social Security Administration will announce the official cost-of-living adjustment for 2013 on October 16. The federal government determines the size of a Social Security COLA based on the percentage change in the Consumer Price Index for Urban Wage Earners (CPI-W) from the third quarter of one year to the third quarter of the next.

“Because the CPI-W includes items with prices that rise more slowly than everyday purchases – refrigerators, for example – as well as items that get cheaper over time, the increase in Social Security checks coming in January may not be sufficient to cover the rising cost of everyday goods,” said Steven Cunningham, director of research and education for AIER.

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http://www.investmentnews.com/article/20121009/BLOG05/121009934

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