Permalink Submitted by Jose Morales on Tue, 2010-10-12 16:57
I’m no expert in guessing whether there will be COLA adjustments, but seeing as how Social Security Benefits will see no COLA adjustment I am not holding out any hope that retirement plans will see one.
Permalink Submitted by Alan Spross on Tue, 2010-10-12 17:41
CCH and other tax firms will probably have their highly accurate estimates out very soon. All the inflation adjustments in the tax code do NOT use the same measure of inflation and they also have different rounding schemes, so making accurate estimates is a real project. With inflation as low as it has been it may well be that the current amount variance from the next threshold will be the most important factor in determining which of them get adjustments. Will post a link as soon as the estimates are released.
Note on SS COLA: No increase for 2011 was expected all along, but 2012 looks pretty bleak as well. The reason is the catchup of the 96.40 Part B premium which has not been increased for most beneficiaries for the second year in a row due to the hold harmless provision which does not allow net SS benefits to decline. By 2012, we could have a catchup of $25.00 per month or more that would eat up much or all of a modest SS COLA. For example, it might eat up all of a 2% COLA in 2012 for a beneficiary receiving a $1,400 gross monthly benefit now.
Special rules apply for those subject to Part B surcharges due to income.
Permalink Submitted by Jose Morales on Tue, 2010-10-12 16:57
I’m no expert in guessing whether there will be COLA adjustments, but seeing as how Social Security Benefits will see no COLA adjustment I am not holding out any hope that retirement plans will see one.
Permalink Submitted by Alan Spross on Tue, 2010-10-12 17:41
CCH and other tax firms will probably have their highly accurate estimates out very soon. All the inflation adjustments in the tax code do NOT use the same measure of inflation and they also have different rounding schemes, so making accurate estimates is a real project. With inflation as low as it has been it may well be that the current amount variance from the next threshold will be the most important factor in determining which of them get adjustments. Will post a link as soon as the estimates are released.
Note on SS COLA: No increase for 2011 was expected all along, but 2012 looks pretty bleak as well. The reason is the catchup of the 96.40 Part B premium which has not been increased for most beneficiaries for the second year in a row due to the hold harmless provision which does not allow net SS benefits to decline. By 2012, we could have a catchup of $25.00 per month or more that would eat up much or all of a modest SS COLA. For example, it might eat up all of a 2% COLA in 2012 for a beneficiary receiving a $1,400 gross monthly benefit now.
Special rules apply for those subject to Part B surcharges due to income.