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. Bucs' Vernon Hargreaves: 'I'm not making any plays'

    Bucs

    TAMPA — Eli Manning gathered his receivers together on the sideline during the Giants' Week 4 game against the Bucs and told them he planned to target the weakest link of the secondary all afternoon.

    Patriots receiver Chris Hogan gets position in front of Bucs cornerback Vernon Hargreaves for a 5-yard touchdown pass in New England’s win on Oct. 5.
  2. Suspect in Maryland office park shooting is apprehended

    Nation

    EDGEWOOD, Md. — A man with a lengthy criminal past who was fired from a job earlier this year for punching a colleague showed up for work at a countertop company on Wednesday and shot five of his co-workers has been arrested, authorities said. Three of them were killed and two critically wounded.

    Harford County, Md., Sheriff Jeffrey Gahler shows a picture of Radee Labeeb Prince, the suspect in the workplace shootings.
  3. Lightning's J.T. Brown to stop anthem protest, focus on community involvement

    Lightning Strikes

    COLUMBUS, Ohio — Lightning wing J.T. Brown will no longer raise his first as a protest during the national anthem before games.

    J.T. Brown says he will work more with the Tampa police and groups that serve at-risk young people.
  4. The two Ricks tangle at what may be final debate

    Elections

    ST. PETERSBURG — In what was likely the last mayoral forum before the Nov. 7 election, Mayor Rick Kriseman and former Mayor Rick Baker started out small, discussing neighborhood issues like recycling and neighborhood funding. They ended tangling over familiar subjects: the future of the Tampa Bay Rays, sewage …

    Ex-Mayor Rick Baker, left, and Mayor Rick Kriseman, right, debated familiar topics. The Times’ Adam Smith moderated.
  5. Tampa Chamber of Commerce announces small business winners

    Business

    TAMPA — The Greater Tampa Chamber of Commerce selected the winners of the 2017 Small Business of the Year Awards at a ceremony Wednesday night at the David A. Straz, Jr. Center for the Performing Arts. More than 600 attendees celebrated the accomplishments of Tampa Bay's small business community.

    Vincent Cassidy, president and CEO of Majesty Title Services, was named Outstanding Small Business Leader of the Year by the Greater Tampa Chamber of Commerce.