WASHINGTON Millions of Social Security recipients and other retirees will get a 2 percent increase in benefits next year, the largest increase since 2012, thought it comes to only $25 a month for the average beneficiary.
The cost-of-living adjustment, or COLA, affects benefits for more than 70 million U.S. residents, including Social Security recipients, disabled veterans and federal retirees. That’s about one in five Americans.
The Social Security Administration announced the COLA Friday.
By law, the COLA is based on a broad measure of consumer prices generated by the Bureau of Labor Statistics. Advocates for seniors claim the inflation index doesn’t accurately capture rising prices faced by seniors, especially for health care.
“It doesn’t make your life any easier. It’s really made it tight,” said Barbara Bogart, who retired from a home health care company. “You have to be so careful to make it each month.”
Bogart, 75, who lives near Indianapolis, said she gets less than $1,000 a month from Social Security, her only source of income.
“I have all the normal costs that people have. I have groceries, gas for my car,” she said. “I have to be cautious.”
Some conservatives argue that the inflation index is too generous because when prices go up, people change their buying habits and buy cheaper alternatives.
Consumer prices went up only slightly in the past year despite a recent spike in gasoline prices after a series of hurricanes slowed oil production in the Gulf Coast, said Max Gulker, senior research fellow at the American Institute for Economic Research.
“For the most part, there was a decline in energy prices for a lot of the year,” Gulker said. “But at the end of the year we saw that uptick in gas from the hurricanes.”
The average monthly Social Security payment is $1,258, or about $15,000 a year.
Congress enacted automatic annual increases …read more
Source:: Deseret News – U.S. & World News