No 2016 Social Security COLA – But Some Medicare Premiums Will Increase
Category: Financial and taxes in retirement
Note on Nov. 12: Final Medicare costs have been announced, which ended up slightly different than the preliminary predictions discussed in this article. See Final Medicare Part Premiums and Deductibles article. See also related article on how current Congressional bill ends the popular Social Security “File and Suspend” strategy for most people not already using this strategy.
October 28, 2015 – It hasn’t happened many times, but it is coming in 2016: there will be no Cost of Living Adjustment (COLA) for those receiving Social Security. That is due to the fact that the cost of living in the U.S. went down, “fueled” by falling energy and commodity prices. This is only the 3rd time in history there has been no COLA. The COLA in 2015 was 1.7%.
This news will undoubtedly disappoint many folks who look forward to a small increase in their monthly Social Security deposit, something they might view as a pay raise every year, although it is really only an adjustment to keep on pace with inflation (which seems to be in check, at least for the present).
Most will dodge a Medicare increase
Meanwhile in the Medicare world, most people will escape a Medicare bullet. Had there been
Comments on "No 2016 Social Security COLA – But Some Medicare Premiums Will Increase"
ella says:
I am in the second category - "Your premiums aren’t deducted from your SS payments (You are eligible for SS, but have delayed claiming. Your initial Part B premium will be $159.30 in 2016)" as i had planned to apply for SS at age 66.
My question is, will everyone's payment rise to $159.30 in 2016 or even 2017, meaning all this will be evened out in the end; OR my payments ALWAYS be that much higher than people who were receiving Medicare and having it deducted from their SS in 2015?
If anyone can help, it would be greatly appreciated.
ella says:
Sorry for the typo, i meant to say, "or will my payments always be ... "
Admin says:
From JM:
They already "means test" Medicare premiums. My wife and I are gonna be getting screwed by that one next year. Even if they only affect 15% of Medicare "beneficiaries" by that one, we will be in that 15%.
I'd rather they just raise the tax rates but leave the Medicare premiums alone instead of "means testing" them. But of course, if they raised the tax rates they'd still screw us on the Medicare premiums.
SandyZ says:
For my husband, this is very bad news - his 2014 income was unusually high due to a few outstanding sales - they will be using 2014 income to determine the Medicare rate. He is retiring on Jan 1 2016 and we will be watching our budget closely to make ends meet on our modest retirement income. How can they judge your ability to pay the increased premiums based on two year old income levels? Guess we will have to withdraw from our IRA to pay for the required part B, which of course means the funds will get taxed for withdrawing...double win for the government! Big loss for we retirees!
ella says:
The higher medicare premium makes no sense! Why are people (me included) being penalized for our age? In six months my Medicare premiums will come out of my Social Security. Presently, i'm not on soc. sec. Spoke to an agent yesterday and my area has no appointments until mid-December, and one payment has to be made before i'm considered on soc. sec. Therefore, i cannot get on soc. sec. before 2016; thus the higher Medicare premium.
My cousin receives medical benefits through her husband's employer. This new law is forcing her to apply for soc. sec. benefits seven months early; however she wouldn't have needed Medicare for several years while her husband continues to work. She is actually saving the gov't money, by not needing Medicare now; however all that will change as she is attempting to go on both soc. sec. and Medicare in December to avoid the higher Medicare premiums. How many others are in her position?
Ludicrous! US gov't, what are you thinking???
DeyErmand says:
Ella, is the new law that is forcing your cousin to collect 7 months earlier because she doesn't work?
ella says:
DeyErmand, She's rushing to get on Medicare and Social Secuity to avoid the higher Medicare rate. And yes, she's not working at this time; but is receiving health benefits thru her husband who is working.
DeyErmand says:
How soon can a person collect social security Ella?
Valerie says:
DeyErmand, a person can start collecting Social Security benefits whenever they turn 62. However, a person isn't eligible to receive Medicare benefits until they are 65. However, they may also receive Medicare benefits sooner depending upon whether they are disabled and/or if they have End-Stage Renal Disease.
SandyZ says:
Does anyone have new info AND understand the new medicare rates that were connected to the passing of the budget this week? Updates please!