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Social Security benefits to go up by 1.5 percent

By STEPHEN OHLEMACHER

Associated Press

POSTED:
LAST UPDATED: 05:06 a.m. HST, Oct 30, 2013


WASHINGTON » Social Security benefits for nearly 58 million people will increase by 1.5 percent next year, the government announced today.

The increase is among the smallest since automatic adjustments were adopted in 1975. It is small because consumer prices haven't gone up much in the past year.

The annual cost-of-living adjustment, or COLA, is based on a government measure of inflation that was released this morning.

The COLA affects benefits for more than one-fifth of the country. In addition to Social Security payments, it affects benefits for millions of disabled veterans, federal retirees and people who get Supplemental Security Income, the disability program for the poor.

The amount of wages subject to Social Security taxes is also going up. Social Security is funded by a 12.4 percent tax on the first $113,700 in wages earned by a worker, with half paid by employers and the other half withheld from workers' pay.

The wage threshold will increase to $117,000 next year, the Social Security Administration said. Wages above the threshold are not subject to Social Security taxes.

Social Security pays retired workers an average of $1,272 a month. A 1.5 percent raise comes to about $19.

"By providing protection against inflation, the COLA helps beneficiaries of all ages maintain their standard of living, keeping many from falling into poverty," said AARP executive vice president Nancy LeaMond. "The COLA announced today is vital to millions, but at an average of just $19 per month, it will quickly be consumed by the rising costs of basic needs like food, utilities and health care."

The COLA announcement had been scheduled for two weeks ago. It was delayed because the Bureau of Labor Statistics did not issue the inflation report for September during the partial government shutdown.

Since 1975, annual Social Security raises have averaged just over 4 percent. Next year will mark only the seventh time the COLA has been less than 2 percent, including three of the past five years. This year's increase was 1.7 percent. There was no COLA in 2010 or 2011 because inflation was too low.

In some years, part of COLA has been erased by an increase in Medicare Part B premiums, which are deducted automatically from Social Security payments. But Medicare announced Monday that Part B premiums, which cover doctor visits, will stay the same in 2014, at $104.90 a month for most seniors.

By law, the cost-of-living adjustment is based on the consumer price index for urban wage earners and clerical workers, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.

The COLA is calculated by comparing consumer prices in July, August and September each year to prices in the same three months from the previous year. If prices go up over the course of the year, benefits go up, starting with payments delivered in January.

Lower prices for gasoline are helping keep inflation low, said Polina Vlasenko, a research fellow at the American Institute for Economic Research.

The average price of a gallon of regular gasoline has dropped over the past year from $3.53 to about $3.28, according to the automotive club AAA.

Associated Press reporter Christopher S. Rugaber contributed to this report.







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rigormortis wrote:
Ha ha, only $20 a month, that's between $200 to $300 a year per worker increase in SS taxes to balance. Match that by consumerr costs and there went your raise; and you thought you were getting ahead.
on October 30,2013 | 04:47AM
RetiredWorking wrote:
rigor, that's $$ ahead of you, lol, jealous bugger. That's enough to fill my work truck for a month, PLUS SEVEN!!! breakfast meals in Wahiawa! So yeah, I'm getting ahead.....of you! Can you imagine, enough $$ to fill my commuter car for a MONTH! Thanks, Social Security!
on October 30,2013 | 05:35PM
mikethenovice wrote:
1.5%? Am I suppose to be happy? I guess that beat the 0.005% CD rates?
on October 30,2013 | 06:04AM
serious wrote:
Of course, our Federal delegates get a 2.2 % pay raise and Federal workers get a 4.5 % raise. Makes Cents to me!!!
on October 30,2013 | 06:13AM
hanalei395 wrote:
Federal pay raise, Jan. 1, 2014, 1% .......The first pay raise in 3 years
on October 30,2013 | 07:02AM
lee1957 wrote:
Where do you get your information? Hanalei395 is correct.
on October 30,2013 | 11:41AM
Kuokoa wrote:
That is so they can take out more for my health care premium -- Obamacare.
on October 30,2013 | 08:01AM
cojef wrote:
Nothing is fair especially with SS. Qualified with over 40 quarters of coverage under SS and also worked as civil servant, but if you were born in 1925, you get reduced SS benefits and your full Federal retirement. Others born other than 1925 get the full 100% SS benefits. Don't know the technical details, so if there is a SS expert out they please explain it to me.
on October 30,2013 | 10:02AM
Maneki_Neko wrote:
Currently inflation is running 2.2% so the raise in SS will allow seniors to fall behind again.
on October 30,2013 | 11:18AM
frontman wrote:
Come on obama, you can at least give them the raise you gave federal workers.
on October 30,2013 | 12:14PM
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