$4 a month? Social Security recipients to get tiny increase
ASSOCIATED PRESS
The Social Security Administration’s main campus is seen in Woodlawn, Md. in Jan. 2013. Millions of Social Security recipients and federal retirees will get only tiny increases in benefits next year, the fifth year in a row that older Americans will have to settle for historically low raises.
WASHINGTON » 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 today, 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.
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“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.
11 responses to “$4 a month? Social Security recipients to get tiny increase”
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Four more years of Obama economic success? Feed the People who would rather stab us in the back? Ask not what the World can do for you. Ask what you can do for World. Give until it hurts. And it is hurting America.
Rich people and executives continue to make more and more.
And some don’t even pay federal income taxes. Oh, wait, he could be our next president.
They don’t give us Social Security participants a proper COLA because haven’t you heard there is no inflation in this country. Obama tells us this and so does the Fed and everybody else, but it is a LIE. So we continue to get shafted and receive almost 0 COLA as we have in a number of years. But prices keep going up and up and up. Every time I go to the grocery store I have to spend more and more. And most other businesses are also raising prices. But the LIE that there is no inflation continues.
The biggest fraud perpetuated against the American people took place on April 20, 1983 when President Reagan signed the bill allowing Social Security benefits to be taxed. Reagan conspired with the Democrats to push(force) this total ripoff down the throats of all recipients receiving SS. Continues to this day; unbelievable. Double,sometimes triple(!) taxation on SS benefits depending on your tax bracket.
Do not blame President Obama it is the republican majority of congress that has taken a sledgehammer to Social Security benefits. The Chump is also in favor of eliminating Social Security. The mega rich consider it be a unnecessary handout. I guess they want people to work until they drop dead while they avoid paying their fair share of taxes.
Except for Warren Buffett and the Clintons. How do we know this? Easy they release their tax returns.
No, the biggest fraud is suggesting that Social Security is solvent. Anyone who can do the math will confirm that the system cannot payout all of the benefits that people have earned to date without a drastic overhaul. The same thing is happening in our State’s ERS. SS is effectively a Ponzi scheme that takes in current money to payout to current beneficiaries. This scheme works as long as their are more contributors than beneficiaries, which had been the case for decades when the Baby Boomer generation worked. Now that that generation has become beneficiaries, not contributors, the system is upside down. Unfortunately, our politicians don’t have the backbone to tell the public the truth so they continue the lie in the hope that they’ll leave office before the crisis hits.
0.3 % – will need a magnifying glass to see it, but it will buy a plate lunch.
Once.
Every little bit is appreciated by this senior. Matter of fact Mr. Abe Lincoln, whose face is honored on the penny, is crying “foul” because of the squeeze placed by me for more buying power!