User Login    
 + Register
PDQ Cleaning
News : Social Security Increase Lowest In Decades
Posted by Randy on 2013/10/14 4:51:53 (376 reads) News by the same author

WASHINGTON (AP) -- Another year, another small raise for millions of people who rely on Social Security, veterans' benefits and federal pensions.

Click to see original Image in a new window

Preliminary figures suggest next year's benefit increase will be roughly 1.5 percent, according to an analysis by The Associated Press. The increase will be small because consumer prices, as measured by the government, haven't gone up much in the past year.

For the second year in a row, it would be one of the lowest raises since automatic adjustments were adopted in 1975.

The exact size of the cost-of-living adjustment, or COLA, won't be known until the Labor Department releases the inflation report for September. That was supposed to happen Wednesday, but the report was delayed indefinitely because of the partial government shutdown.

More than a fifth of the country is waiting.

Nearly 58 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,162. A 1.5 percent raise would increase the typical monthly payment by about $17.

The COLA also affects benefits for more than 3 million disabled veterans, about 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.

The COLA is usually announced in October to give Social Security and other benefit programs time to adjust January payments. The Social Security Administration has given no indication that raises would be delayed because of the shutdown, but advocates for seniors said the uncertainty was unwelcome. Social Security benefits have continued during the shutdown.

David Certner of AARP said seniors are getting squeezed financially from many sides. Retirement portfolios took a big hit when the markets collapsed a few years ago, and even though the markets have rebounded, safer investments favored by older Americans are paying relatively low interest rates.

"Social Security COLAs have been low and anybody who's trying to live off interest rates and getting returns on any of the meager savings they have is getting killed because there's no return on your CDs or other fixed income assets," Certner said. "The one bright spot is that health care costs have slowed down. But at least on the income side, it has been a pretty tough few years in terms of trying to keep up with expenses."

Automatic COLAs were adopted so that benefits for people on fixed incomes would keep up with rising prices. Many seniors, however, complain that the COLA sometimes falls short, leaving them little wiggle room.

David Waugh of Bethesda, Md., said he can handle one small COLA but several in a row make it hard to plan for unexpected expenses.

"I'm not one of those folks that's going to fall into poverty, but it is going to make a difference in my standard of living as time goes by," said Waugh, 83, who retired from the United Nations. "I live in a small apartment and I have an old car, and it's going to break down. And no doubt when it does, I'll have to fix it or get a new one."

Since 1975, annual Social Security raises have averaged 4.1 percent. Only six times have they been less than 2 percent, including this year, when the increase was 1.7 percent. There was no COLA in 2010 or 2011 because inflation was too low.

By law, the cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, 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.

This year, average prices for July and August were 1.4 percent higher than they were a year ago, according to the CPI-W.

Once the September report - the final piece of the puzzle - is released, the COLA can be officially announced. If prices continued to slowly inch up in September, that would put the COLA at roughly 1.5 percent.

Several economists said there were no dramatic price swings in September to significantly increase or decrease the projected COLA. That means the projection shouldn't change by more than a few tenths of a percentage point, if at all.

Polina Vlasenko, a research fellow at the American Institute for Economic Research, projects the COLA will be between 1.4 percent and 1.6 percent.

Her projection is similar to those done by others, including AARP, which estimates the COLA will be between 1.5 percent and 1.7 percent. The Senior Citizens League estimates it will be about 1.5 percent.

Lower prices for gasoline are helping to fuel low inflation, Vlasenko said.

Gasoline prices are down 2.4 percent from a year ago while food prices are up slightly, according to the August inflation report. Housing costs, meanwhile, went up 2.3 percent and utilities increased by 3.2 percent.

Medical costs went up less than in previous years but still outpaced other consumer prices, rising 2.5 percent.

"In years with high COLA's, a lot of that had to do with fuel prices and in some cases, food prices. Neither of those increased much this year," Vlasenko said. "So that kept the lid on the overall increase in prices."

Printer Friendly Page Send this Story to a Friend Create a PDF from the article


Other articles
2014/10/24 10:28:48 - Solar Farm Topic Of Economic Development Meeting
2014/10/24 10:25:45 - Livingston County Library Encourages Reading To Young Children
2014/10/24 10:23:16 - Festival Of Trees Fund-Raiser Set For November 28th
2014/10/24 10:18:02 - Bogard Woman Seriously Injured In Accident
2014/10/24 10:13:53 - Unionville Man Injured In Accident South Of Unionville
2014/10/24 4:42:51 - 5 Ways To Tell If Someone Is Cheating On You
2014/10/24 4:29:07 - Six Bodies Identified After Decades In Oklahoma Lake
2014/10/24 4:24:30 - Peyton Manning Rips Broncos' Scoreboard Operator
2014/10/24 4:20:18 - How To Teach Kids To Be Nice Online
2014/10/24 4:14:12 - Police: Missouri Inmate Who Attempted Suicide Dies
2014/10/24 4:09:40 - 1 Taken To Hospital After Being Hit By Train
2014/10/24 4:05:48 - 8-Year Old Scores Touchdown, Team Fined $500, Coach Suspended
2014/10/23 10:42:45 - Disaster Declaration Requested For North Missouri Counties
2014/10/23 10:38:01 - THS Marching Band And Color Guard To Hold Recognition Program
2014/10/23 10:35:23 - Snow Removal Bids Sought
2014/10/23 6:38:04 - Trenton Chamber Ambassadors To Hold Annual Halloween Trick Or Treat Night
2014/10/23 6:30:41 - Chillicothe Firefighters Respond To Vehicle Fire
2014/10/23 6:26:35 - Meadville Teen Hurt In Accident East Of Laredo
2014/10/23 6:23:59 - Spickard Man Injured In Accident East Of Gallatin
2014/10/23 4:46:44 - Giant Gold Nugget To Be Sold In San Francisco
2014/10/23 4:30:00 - The Worst Things To Buy At Walmart
2014/10/23 4:17:35 - Iowa Man Pleads Guilty To Missouri Bank Robbery
2014/10/23 4:09:49 - UK Man Faked Coma For 2 Years To Avoid Court
2014/10/23 4:04:17 - Wife Of Wade Davis Forks Over World Series Tickets As Tip To Server
2014/10/23 4:00:50 - FBI Confiscates Hot-Selling Royals Panties
2014/10/22 6:42:06 - Missouri Livestock Symposium To Be Held In Kirksville December 5th
2014/10/22 4:52:49 - Dead Babies In Winnipeg Storage Unit 'Tragic Beyond Belief'
2014/10/22 4:43:12 - Two Sunken Vessels From World War II Were Just Found Off The North Carolina Coast
2014/10/22 4:34:36 - Partial Solar Eclipse to Darken US Skies Thursday
2014/10/22 4:26:06 - Homeless Man Victim Of Knock-Out Game Attack



Bookmark this article at these sites

                   

Listen to KTTN-FM