"I'm not one of those folks that's going to fall into poverty, but it is going to make a difference in my standard of living as time goes by," said Waugh, 83, who retired from the United Nations. "I live in a small apartment and I have an old car, and it's going to break down. And no doubt when it does, I'll have to fix it or get a new one."
Since 1975, annual Social Security raises have averaged 4.1 percent. Only six times have they been less than 2 percent, including this year, when the increase was 1.7 percent. There was no COLA in 2010 or 2011 because inflation was too low.
By law, the cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.
The COLA is calculated by comparing consumer prices in July, August and September each year to prices in the same three months from the previous year. If prices go up over the course of the year, benefits go up, starting with payments delivered in January.
This year, average prices for July and August were 1.4 percent higher than they were a year ago, according to the CPI-W.
Once the September report, the final piece of the puzzle, is released, the COLA can be announced officially. If prices continued to slowly inch up in September, that would put the COLA at roughly 1.5 percent.
Several economists said there were no dramatic price swings in September to significantly increase or decrease the projected COLA. That means the projection shouldn't change by more than a few tenths of a percentage point, if at all.