The Social Security Administration announced last week that for the second consecutive year, the nation’s 58 million Social Security recipients will not receive an automatic inflation adjustment or cost of living adjustment (COLA) to their monthly retirement or disability benefits. With unemployment still at around 9.6 percent and wages stagnant, retailers have been reluctant to increase prices. Inflation as measured by the Consumer Price Index (CPI) rose just 0.1 percent in September. Over the past year, core prices (excluding food and energy) have risen only 0.8 percent, the smallest 12-month gain in more than 40 years, according to the Associated Press. Because increases in Social Security benefits are tied to the CPI by federal law, the agency can’t provide an increase until inflation exceeds the level it reached in 2008. That year’s energy spike led to a 5.8 percent increase in Social Security payments, the largest adjustment in 27 years. While Social Security benefits may not be increasing, the number of Americans applying for benefits has. Although fiscal 2010 numbers have not yet been released, the Social Security Administration reported for fiscal year 2009, 2.57 million Americans applied for retirement benefits, 22 percent more than the year prior. Based on the number of people reaching retirement age, Social Security had expected a 15 percent increase. The difference, it said, was the impact of the weak economy and the more than 7.2 million jobs eliminated since the recession started in December 2007. While a growing number of Americans have recognized the importance of retirement savings in addition to Social Security, two years of no increase in benefits may begin to impact quality of life, particularly as expenses such as health care – which retirees count as a larger percentage of their expenses than younger population segments – continue to rise faster than inflation. If you or a loved one has concerns about the role Social Security will play in your retirement income, please call your personal financial planner, Jordan, anytime at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website at http://www. JordanDechtman.com.