Social Security Increase of 1.5 Percent Among Lowest Since 1975

Image: Social Security Increase of 1.5 Percent Among Lowest Since 1975

Monday, 14 Oct 2013 07:49 AM

By Michael Mullins

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The social security increase this year will likely be a small one, making it the second year in a row in which the federal trust fund payout that millions of Americans depend on has seen only slight growth.

The slight increase is due to the fact that consumer prices, as measured by the government, have not gone up much in the past year, leading analysts at the Associated Press to estimate that next year's benefits will rise at a rate of approximately 1.5 percent.

Similarly, those who rely on veterans' benefits and federal pensions will also see the same slight increase in their payments.

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If the increase is 1.5 percent as the AP suggests, which on average amounts to a typical monthly increase of about $17, it would represent one of the lowest raises since automatic adjustments were adopted in 1975, the news service points out.

Nearly 58 million retirees, disabled workers, spouses and children, whom amount to more than a fifth of the country, currently receive Social Security benefits. The average monthly payment is $1,162.

How much the cost-of-living adjustment or COLA will actually be can only be calculated when the Labor Department releases the inflation report for September, which had been scheduled for Wednesday, however was delayed due to the partial government shutdown.

Approximately 2.5 million federal retirees and their survivors, along with more than 3 million disabled veterans, and more than 8 million people who get Supplemental Security Income – the disability program for the poor, will also affected by the delay to COLA determination.

"Social Security COLAs have been low and anybody who's trying to live off interest rates and getting returns on any of the meager savings they have is getting killed because there's no return on your CDs or other fixed income assets," David Certner of AARP told the AP. "The one bright spot is that health care costs have slowed down. But at least on the income side, it has been a pretty tough few years in terms of trying to keep up with expenses."

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Having initially been implemented to assist those living on fixed incomes allowing them to keep up with the country's inflation rate, automatic COLAs have often been criticized by seniors who claim they fall short of their intended purpose, and do not adequately reflect the rising prices of goods and services they require.

Related stories:

Social Security Disability Insurance Is Fraught with Fraud

Critical Social Security Information Every Senior Must Read

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