$4 a month? Social Security recipients to get tiny increase

Posted October 18

— Millions of Social Security recipients and federal retirees will get a 0.3 percent increase in monthly benefits next year, the fifth year in a row that older Americans will have to settle for historically low raises. The adjustment adds up to a monthly increase of less than $4 a month for an average recipient.

The cost-of-living adjustment, announced by the government Tuesday, will affect more than 70 million people — about 1 in 5 Americans. For recipients, the average monthly Social Security payment now is $1,238.

Unfortunately for some seniors, even the small increase will probably be wiped out by an expected increase in Medicare Part B premiums, which are usually deducted from Social Security payments.

By law, rising premiums for most Medicare recipients cannot exceed their Social Security cost-of-living increase. That's known as the "hold harmless" provision. However, new enrollees and high-income retirees are not covered by that provision, so they could face higher Medicare premiums, which will be announced later this year.

There was no Social Security benefit increase this year, and next year's will be small because inflation is low, driven in part by cheaper fuel prices. The low inflation rate should help keep some older folks' bills from rising very rapidly.

Don't tell that to Millicent Graves, a retired veterinary technician, who says Medicare and supplemental insurance premiums eat up nearly a third of her $929 monthly Social Security payment. The 72-year-old from Williamsburg, Virginia, says her insurance premiums went up by $46.50 this year, and her cable TV, internet and phone bill went up, too.

"I just lose and lose and lose and lose," Graves said.

More than 60 million retirees, disabled workers, spouses and children get Social Security benefits. The COLA also affects benefits for about 4 million disabled veterans, 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor. Many people who get SSI also receive Social Security.

Since 2008, the COLA has been above 2 percent only once, in 2011. It's been zero three times.

"This loss of anticipated retirement income compounds every year, causing people to spend through retirement savings far more quickly than planned," said Mary Johnson of the Senior Citizens League. "Over the course of a 25- or 30-year retirement, it reduces anticipated Social Security income by tens of thousands of dollars."

The cost-of-living adjustment is based on a broad measure of prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.

If prices go up, benefits go up. If prices drop or stay flat, benefits stay the same.

Gasoline prices have fallen by more than 6 percent over the past year, according to the September inflation report, while the cost of medical care has gone up by more than 5 percent.

For seniors who don't drive much, they don't get the full benefit of low gas prices, said Max Gulker, a senior research fellow at the American Institute for Economic Research. Many seniors spend more of their income on health care.

Graves said she appreciates lower gas prices, but the higher medical costs are a problem.

"I just have to rely more each month on cashing in investments," Graves said. "I'm lucky I can do that."

Democratic presidential nominee Hillary Clinton has embraced the idea of expanded benefits for certain low-income retirees. She says the nation would pay for it by raising taxes on "the highest-income Americans."

Breaking with other Republicans, GOP nominee Donald Trump has pledged not to cut benefits. However, he has offered few specifics on how he would address Social Security's long-term financial problems.

Social Security is financed by a 12.4 percent tax on the first $118,500 of a person's annual wages, with the worker paying half and the employer paying the other half. The amount of wages subject to the payroll tax will go up to $127,200 next year, the Social Security Administration said.

About 173 million workers will pay Social Security taxes next year — about 12 million of them will face higher taxes because of the higher cap, the agency said.


Associated Press writers Josh Boak and Ricardo Alonzo-Zaldivar contributed to this report.


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  • Aiden Audric Oct 18, 3:14 p.m.
    user avatar

    View quoted thread

    It's quite clear you haven't done proper research on topics that are important to you. No one hear means you disrespect - the comments reflect the content, not the messenger.

    Please, take the time to learn how the government works regarding issues you care about.

    Otherwise you only have incomplete memories of what you heard on the news - news that is crafted by someone with an opinion of their own to tell you.

    I don't say this smugly - I sincerely want you to find some truth so you perhaps can find some comfort is letting go of those things that are false, and can join into conversations with your friends, and others, where your opinion is backed up by facts that you learned on your own.

  • Marty Martin Oct 18, 2:17 p.m.
    user avatar

    The COLA formula is based on a law signed by Pres. Ford in the 1970s!
    Everytime Democrats propose modifying the formula for the 21st Century with increased benefits, ALL Republicans vote "NO" and the bills FAIL.

  • Clarence Drumgoole Oct 18, 1:33 p.m.
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    Research and "FACTS" appreciated!

  • Donnie Dietrich Oct 18, 1:09 p.m.
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    The reason in the article about the increase being small is a bunch of bunk. within the next couple of months if not sooner, you will be hearing about how SS is going broke and how the % needs to increase. Our Federal government just gives everything away.

  • Donnie Dietrich Oct 18, 1:07 p.m.
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    View quoted thread

    that's what they said on the news several times. That SS benefits would go to help the refugees and also they would get Medicaid or Medicare, can't remember which.

  • Larry Alston Oct 18, 10:13 a.m.
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    The article plainly says that the increase is small because of the COLA. Where do you hear that Social Security goes to refugees? If you mandate that you have to pay into Social Security in order to collect benefits, then all the "stay-at-home mom's don't get benefits, and neither do a lot of children (handicapped).

  • Bill Huntington Oct 18, 9:38 a.m.
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    In other news....victims of Hurricane Matthew can't rebuild and aren't given enough from federal aid to move, but refugees are being brought over here and are given housing and benefits. Seriously, why can't this money be used to take care of our own people????

  • Donnie Dietrich Oct 18, 8:41 a.m.
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    The reason that the increase is so small is that all of the benefits are going to refugees. People that have never paid a dime into Social Security and would love to take over our country and are being very successful thanks to Obama and his executive orders.