## Provisions Affecting Cost-of-Living Adjustment

- Office of the Chief Actuary
- Individual Provisions
-               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          (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          2023 Trustees Report.         

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

| Number | Table and graph selection                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| A1     | Starting December 2024, 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:- Social Security Advisory Board 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| A2     | Starting December 2024, 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:- Social Security Advisory Board 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| A3     | 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.              Summary measures and graphs         (PDF version)       Detailed single year tables          (PDF version)       Memoranda containing this or a similar provision:- Ribble 2016
- FY 2014 Budget
- Chaffetz 2011
- Becerra 2011
- Fiscal Commission 2010
- Bipartisan Policy Center 2010
- Social Security Advisory Board 2005                                                                                                                                                                                                                                                                                                                                                                                   |
| A4     | Starting December 2026, 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:- National Research Council & National Academy of Public Administration 2010                                                                                                                                                                                                                                                                                             |
| A5     | Starting December 2024, 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:- Senate Special Committee on Aging 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| A6     | Starting December 2025, 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:- Sanders 2023
- Deutch, Hirono 2022
- Sanders, DeFazio 2022
- Lawson 2021
- Larson, Blumenthal, Van Hollen September 2019
- Deutch, Hirono 2019
- Sanders, DeFazio 2019
- Larson, Blumenthal, Van Hollen January 2019
- Deutch, Hirono 2017
- Lawson 2017
- Larson 2017
- Sanders, DeFazio 2017
- Sanchez 2016
- Sanders 2016
- Schatz 2015
- Deutch 2015
- DeFazio 2015
- Sanders 2015
- Larson 2015
- Larson 2014
- Harkin 2013
- Harkin 2012
- Becerra 2011
- Deutch 2010                                                                                                   |
| A7     | Starting December 2024, 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:- Hutchison 2011                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| A8     | Starting December 2024, 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:- Bipartisan Policy Center October 2016
- Bipartisan Policy Center June 2016                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| A9     | For single/head-of-household/married-filing-separate taxpayers with modified 		adjusted gross income (MAGI) below $108,700 and for joint filers with MAGI below 		$217,400 for December 2025 ($85,000 and $170,000 multiplied by estimated CPI-U 		for 2018-2025), 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 2025 COLA. For those beneficiaries whose MAGI is 		above these thresholds, provide no COLA. Use prior tax year income data for this 		determination. Use the chain-weighted CPI for the COLA for years prior to benefit 		receipt. Index the eligibility income threshold amounts to the CPI-U after 		December 2025.              Summary measures and graphs         (PDF version)       Detailed single year tables          (PDF version)        Memorandum containing this or a similar provision:- Johnson 2016 |
|        | Summary list of all options in this category                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |