Individuals who receive Social Security benefits are set to get a slight bump in their monthly payments in 2017, putting many seniors in a bind when it comes to their financial situations. The federal government recently announced that it will be raising the monthly benefits for Social Security recipients through a cost-of-living adjustment (COLA).
The COLA is determined by the federal government’s official measure of consumer prices. In 2016, the government opted not to increase Social Security Benefits. However, 2017 will see a COLA due to low inflation numbers. This marks the fifth straight year that U.S. seniors have received either no increase or a minor increase in their Social Security benefits. During that time, the COLA has remained at zero three times.
The specific amount of next year’s increase is 0.3 percent and will affect more than 70 million people living in the United States, including retirees, disabled workers, disabled veterans, and individuals who receive Supplemental Security Income (SSI). According to federal statistics, the average monthly payment provided by Social Security is $1,238, which means that the COLA in 2017 will be less than $4 per month on average.
Seniors in this country face incredible difficulties as far as meeting their financial obligations. That’s because health costs and other necessary expenses are often significantly higher for people as they get older. In fact, Medicare B premiums are likely to go up next year by an amount even higher than the COLA. Since these health insurance premiums are typically deducted from a Social Security recipient’s monthly payments, the average Social Security payment might not go up at all in 2017.
This is a real problem for seniors. Mary Johnson, a Social Security and Medicare policy analyst, said that seniors end up spending through their retirement savings “far more quickly than planned” when they lose anticipated retirement income like Social Security.
For further information, read the Yahoo.com article, “Social Security Recipients to Get Tiny Increase in Benefits.”
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