There was not cost of living adjustment for Social Security benefits in 2016.
The good news is that there will be an increase in benefits for 2017. However, that increase will only be 0.3%, the lowest in history. This means that a retiree who currently receives the average of $1,350 per month will see a $4 increase in 2017.
To go along with that, however, the maximum wage amount subject to the Social Security payroll tax will increase by $8,700, from $118,500 to $127,200. For workers subject to the payroll maximum, this will amount to a tax increase of $539.40. For self-employed workers, who must pay both the employee’s and the employer’s portion of the payroll tax, this will amount to a tax increase of $1,079.80.
Though the benefit increase is tiny, this also means that inflation remains low, since the COLA is tied to a consumer price index.
This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.