Those holding their breath for a substantial bump in 2017’scost-of-living-adjustment to Social Security benefits are most likely doingso in vain.

On October 18, the U.S. Department of Labor's Bureau of LaborStatistics will officially announce the Social SecurityCost-of-Living Adjustment rate for 2017, which is derived fromaveraging the July, August, and September inflation numbers fromthe Consumer Price Index for Urban Wage Earners and ClericalWorkers, or the CPI-W index.

From there, actuaries average this year’s inflation increasewith the previous Cost-of-Living Adjustment, which was made in thethird quarter of 2014. There was no COLA in 2015.

If this year’s three-month CPI-W gauge is higher than the thirdquarter’s in 2014, then an increase in the COLA is warranted.

Earlier this year, the Social Security Administration released its ownpredictions for the 2017 COLA, cautioning that any increase shouldbe expected to be slight. In its 2016 Trustees Report, SSAestimated that a 0.2 percent COLA increase is most likely.

In the third quarter of 2014, the average CPI-W registered at234.252. Data from July and August of this year, which has alreadybeen released, showed marginal increases from the 2014 baselinenumber—234.789 for July, and 234.909 for August.

Since 1975, COLA increases have been issued in all but threeyears — 2009, 2010 and 2015. In that period, the increase dropped22 times from the previous year, but on average, the COLA hasincreased 3.88 percent since 1975, and 2.27 percent since 2000.

If SSA’s predicted 2017 increase of 0.2 percent holds true, itwould mark the lowest rate increase on record, not accounting forthe three years when there was no increase.

Changes to defined contribution and defined benefit planlimits

Inflation data from the third quarter of this year will alsoaffect the amounts on retirement benefit plan limits.

Those limits are calculated using inflation measurements thatare different from how the Social Security Administration handlesCOLA adjustments. The Consumer Price Index for All Urban Consumers,or CPI-U, is used to establish COLA increases for defined benefitand defined contribution plans, not the CPI-W used to set COLAincreases for Social Security.

By and large, limits to retirement plans will remain unchangedin 2017, with a couple of exceptions, according to Marge Martin, aprincipal and actuary for Buck Consultants professional servicesgroup, a division of Xerox HR Services.

The $18,000 deferral limit on 401(k) and other definedcontribution plans will likely not change, unless inflation numbersfor September of 2016 show a 2.7 increase, a rate that would faroutpace the number expected by the consensus of the country’seconomists, Martin said in an interview.

But if the CPI-U numbers in September are equal to the smallincrease seen in August, some retirement funding thresholds willmarginally change.

In a blog post, Martin predicted that the defined contributionannual addition threshold will increase to $54,000, from $53,000this year. The annual addition is the combination of employer andemployee contributions, and forfeitures, or benefits an employee isnot fully vested in.

Also, the maximum pension payout in a defined benefit plan isexpected to increase from $210,000 to $215,000, according toMartin’s analysis.

And she predicts the compensation limit, which is the maximumsalary a defined benefit plan can use to calculate pensionbenefits, will increase from $265,000 to $270,000.

Medicare premiums expected to jump more than 22 percent

The 0.2 percent predicted COLA increase on Social Securitybenefits amounts to a $2 increase in benefits for every $1,000. Theaverage monthly Social Security benefit is $1,335.

For some seniors, the paltry COLA increase is compounded by thefact that the Medicare Board of Trustees is calling for Part Bpremiums to increase more than 22 percent, from about $121 a monthin 2016 to about $149 a month in 2017. Those premiums are deductedfrom Social Security benefits.

Under Medicare’s "hold harmless" provision, most Americans,including the most vulnerable seniors, are protected from havingtheir Social Security benefits reduced because of increases inMedicare premiums. The rule applies to all beneficiaries withhousehold income of less than $85,000 a year for a single retiree,and $170,000 for a married couple.

Low inflation most affects Social Security recipients

Low inflation’s impact on COLA adjustments will affect thoseseniors that most rely on Social Security to fund retirement,compared to the effect on deferral and benefit limits for thosesaving for retirement, notes Martin.

“The benefits aren’t going up because the index says the cost ofliving isn’t either — but ask most seniors who are seeing theirrent go up, and they’ll probably say the landlord isn’t relying onthe CPI-W to base their increases,” said Martin.

“The low COLA increases by far have the most impact on SocialSecurity beneficiaries,” she added. “For the limits on definedbenefits, most people with a pension aren’t getting anything nearthe affected thresholds. And as for the limits on 401(k) deferrals,how many people are actually saving the maximum amount,” saidMartin.