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BenefitsLink > Q&A Columns >

Stop, Look & Listen: Railroad Retirement Benefits Q&A

Answers are provided by Robert S. Kaufman

Cost-of-Living Adjustments for 2010 and 2011

(Posted May 7, 2009)

Question 705: I just read that there will be no Social Security Cost-of-Living-Adjustments for 2010 and 2011.

Will this affect Railroad Retirement?

Answer: As of now, there might not be an automatic cost of living increase in any of the Federal programs including Social Security, Railroad Retirement, Veterans' and Civil Service Annuities, effective in December 2009 and paid in January 2010.

Because of the economic situation there hasn't been any inflation in the items tracked so far this year which are used to determine the amount of benefit increases. The actual calculation compares the average of the indicies for the months of July, August, & September 2009 with the same three month period in 2008. Two of the indicies are energy costs & real estate costs, both of which have registered significant declines in 2009 compared to 2008.

In fact, the current total is actually a negative amount,8.8% through February 2009 (but benefits will not be reduced). We will have to wait & see if the negative trend continues in the third quarter of 2009.

This would mark the first time since the automatic annual adjustments for cost-of-living began in 1975 that there would not be an increase in monthly benefits. The lowest increase until now took place in 1986 and in 1995 when benefits were increased by 1.3%.

Of course if no benefit increases are made, then most of the people who have Part B Medicare will not see an increase in their premiums for 2010 because Part B premium increases are limited to the dollar amount that benefits are raised by the annual cost-of living adjustment.


Important notice:

Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.

The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.


Copyright 1997-2017 Robert S. Kaufman
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