Cost of Living Adjustment Calculator 2017

What is COLA?

Cost of Living Adjustment (COLA) is an increase in wages, salaries, or benefits designed to offset the effects of inflation. It ensures that the real value of money remains stable over time.

COLA is most commonly applied to:

• Pension payments
• Government benefits
• Employee salaries
• Retirement accounts

The amount of COLA is typically based on the Consumer Price Index (CPI) for urban wage earners and clerical workers (CPI-W).

How to Calculate COLA

To calculate COLA, you need to know:

1. Your current salary or benefit amount
2. The percentage increase in the CPI-W from the previous year to 2017

The formula for calculating COLA is:

For example, if your current salary is $50,000 and the CPI-W increased by 2% in 2017, your COLA would be $1,000, and your adjusted salary would be $51,000.

COLA Formula

The COLA formula is straightforward:

Where:

• Current Salary - Your current salary or benefit amount
• CPI-W Increase - The percentage increase in the CPI-W from the previous year to 2017

This formula helps you determine how much your salary should increase to maintain its purchasing power in 2017.

Worked Example

Let's say you have a current salary of $60,000 and the CPI-W increased by 2.5% in 2017.

1. Calculate the COLA amount:

   COLA Amount = $60,000 × (2.5 / 100) = $1,500

2. Calculate the adjusted salary:

   Adjusted Salary = $60,000 + $1,500 = $61,500

Your adjusted salary for 2017 would be $61,500, accounting for the 2.5% increase in the cost of living.