For Mark Roberts’ Use: Any day now, we will receive the news of next year’s cost of living adjustment (COLA) for Social Security beneficiaries. These numbers are typically released mid-October, with the increase (if any) taking effect in January of the following year.

While we wait for the official announcement, let’s take a look at predictions, as well as implications of the potential COLA.

According to the Senior Citizens League, a nonpartisan advocacy group, the COLA for 2019 will probably result in a 2.8 percent bump in payments. That number is approximate, with possible variations of a few tenths of a percentage point either way.

That estimate rests on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), to which COLA has been tied since 1975. Typically, cost of living adjustments are approximately equal to the inflation level observed within the previous year’s CPI-W. So, the CPI-W, which has approached 3 percent this year, will determine the increase in benefits checks issued for 2019.

Any increase in benefits is a good thing, especially considering COLA has been non-existent to very small in the past few years. If we do indeed see a COLA of 2.8 to 3 percent this year, it will be the largest bump since 2012.

On the other hand, we can’t exactly rely upon Social Security COLAs in retirement, to keep our budgets in line with inflation. That’s because the CPI-W measures prices consumers pay for a variety of goods and services, but does not account for housing and healthcare. With housing and healthcare remaining the two largest expenses faced by most retirees, Social Security checks might not always keep pace with your own rising costs of living.

Keeping that in mind, remember to plan carefully for inflation with regard to your retirement budget. Schedule a consultation with us, and we can show you ways to provide for an income that keeps pace with inflation during your Golden years.