Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Social Security benefits to rise 2 percent, largest bump since 2012

WASHINGTON — Millions of Social Security recipients and other retirees will get a 2 percent increase in benefits next year. It's the largest increase since 2012, but comes to only $25 a month for the average beneficiary.

The Social Security Administration announced the cost-of-living increase Friday.

The 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.

By law, the cost-of-living adjustment, or 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's squeezing them. It's causing them to dip into savings more quickly," said Mary Johnson of The Senior Citizens League. "The lifetime income that they were counting on just isn't there."

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 hurricanes slowed oil production in the Gulf Coast, said Max Gulker, senior research fellow at the American Institute for Economic Research.

Gulker projects the COLA will be between 1.7 percent and 2.1 percent.

"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."

Congress enacted automatic annual increases for Social Security in 1975. Presidents often get blamed when increases are small or zero, but President Donald Trump has no power to boost the increase, unless he persuades Congress to change the law.

In 2009, President Barack Obama persuaded Congress to approve one-time payments of $250 to Social Security recipients as part an economic stimulus package.

Over the past eight years, the COLA has averaged just above 1 percent. In the previous decade, it averaged 3 percent.

Johnson noted that multiple years of small or no COLA's reduces the income of retirees for the rest of their lives.

"Think about the length of a retirement period. Eight years is about a third of a (healthy) retirement," Johnson said.

The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of consumer prices. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.

The August report says energy prices are up 6.5 percent from the previous year, while the cost of medical care is up just 1.7 percent. The cost of food is up 1.1 percent.

The COLA is calculated using the average CPI-W for July, August and September, and comparing it to the same three months from the previous year.

The numbers for July and August suggest a COLA of 1.7 percent. The numbers for September are to be released Friday.

Social Security benefits to rise 2 percent, largest bump since 2012 10/13/17 [Last modified: Friday, October 13, 2017 9:02am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Plan your weekend: Clearwater Jazz Holiday, Faith Hill and Tim McGraw, MarineQuest, Florida Orchestra pops in the park, rodeo

    Events

    Plan your weekend

    Concerts

    Music weekend: Clearwater Jazz Holiday, Faith Hill and Tim McGraw and Bruno Mars all in one weekend? We have a playlist of a weekend coming up. Thursday brings Bruno's sold-out 24K Magic World Tour to Amalie Arena. The next day brings the country power …

    Bill Clark and Danelle Dasouqi admire the chalk art on the side walk during the final day of the three day Chalk Art Festival in Clearwater Beach. JIM REED/STAFF
  2. Lightning approaches decision time for Mikhail Sergachev

    Lightning Strikes

    COLUMBUS, Ohio — Mikhail Sergachev had dinner with his host family from juniors Monday.

    The Lightning has to decide, as early as this weekend whether Mikhail Sergachev will stick in the NHL or return to juniors for another season. [DOUGLAS R. CLIFFORD | Times]
  3. Tampa man charged in hit-and-run crash that killed bicyclist on I-4 exit ramp in Tampa

    Accidents

    TAMPA — A 44-year-old Tampa man was arrested and charged Wednesday in a hit-and-run crash that killed a bicyclist earlier in the day.

    Christopher Jerimiah Cole, 44, of Tampa was driving this silver Mercedes on Wednesday when it struck a bicyclist on the exit ramp from eastbound Interstate 4 to southbound U.S. 301, according to the Florida Highway Patrol. Cole kept driving, troopers said. The bicyclist, a 45-year-old Brandon man, died at the scene. His name was not immediately released because troopers were working to notify his family. [Florida Highway Patrol]
  4. Quarterbacks, head coach targeting Vernon Hargreaves; 'I'm not producing,' he says

    Bucs

    Eli Manning gathered his receivers together during the Giants' Week 4 game against the Bucs and informed them of the weakest link of the secondary he planned to target that afternoon.

    Quarterbacks this season have a 128.7 rating when targeting Vernon Hargreaves. [LOREN ELLIOTT   |   Times]
  5. Rick Baker's radio ad said Rick Kriseman missed NAACP event---but he didn't.

    Blogs

    A radio ad narrated by St. Petersburg civil rights activist Sevell Brown and paid for by a political-action committee supporting Rick Baker asserts that Mayor Rick Kriseman "couldn't be bothered to show up" for a recent NAACP event.

    Rick Kriseman didn't skip recent NAACP event, but Rick Baker radio ad claims he did