Tuesday, October 18, 2016 10:01 pm
Social Security recipients get tiny increase next year
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 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 rapidly.
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.