Cost of Living Allowance 2018 Calculator

What is Cost of Living Allowance?

The Cost of Living Allowance (COLA) is an adjustment to certain government benefits, such as Social Security, to help recipients keep up with inflation. In 2018, the COLA was 2.8% for most beneficiaries.

This adjustment is based on the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers, which measures changes in the cost of living over time. The COLA is calculated annually and applied to eligible benefits.

How to Calculate Cost of Living Allowance

Calculating your personal COLA involves several steps:

1. Determine your current benefit amount
2. Identify the COLA percentage for your year (2.8% in 2018)
3. Multiply your current benefit by the COLA percentage
4. Add the result to your current benefit to get your adjusted amount

Use our calculator to perform these calculations quickly and accurately.

Cost of Living Allowance Formula

The formula above shows how to calculate both your adjusted benefit and the specific COLA amount you'll receive.

Example Calculation

Let's say you currently receive $1,200 per month in benefits. The 2018 COLA percentage is 2.8%.

1. Current Benefit = $1,200
2. COLA Percentage = 2.8% or 0.028
3. Adjusted Benefit = $1,200 × (1 + 0.028) = $1,233.60
4. COLA Amount = $1,200 × 0.028 = $33.60

Your adjusted benefit would be $1,233.60, with an additional $33.60 from the COLA.

Factors Affecting Cost of Living Allowance

Several factors influence the COLA calculation:

• Inflation Rate: The primary factor is the CPI, which measures price changes for a basket of goods and services.
• Benefit Type: Different government benefits may have different COLA formulas or eligibility requirements.
• Recipient Income: Some benefits have income limits that affect COLA eligibility.
• Location: COLA calculations may vary by geographic region due to differences in local cost of living.