Benefit increases for recipients of Social Security, veterans’ benefits and federal pensions are expected to be about 1.5 percent next year, according to an analysis of preliminary figures by the Associated Press. The reason for the small hikes is consumer prices, as measured by the government, haven’t grown much in the past year, the AP said.
For the second consecutive year, the cost-of-living adjustment—COLA —would be among the lowest approved since automatic adjustments were adopted in 1975, AP’s report said. The exact COLA increase won’t be known until the U.S. Labor Department releases its September inflation report. That was supposed to be out last Wednesday, but the partial government shutdown has delayed the report indefinitely, AP said.
Nearly 58 million retirees, disabled workers, spouses and children receive Social Security benefits. The average monthly payment is $1,162, and a 1.5 percent hike would add about $17 to the typical monthly payment.
More than 3 million disabled veterans, roughly 2.5 million federal retirees and their survivors and more than 8 million people who get Supplemental Security Income, a disability program for the poor, will receive a COLA for 2014.
“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,” David Certner of AARP told the Associated Press. “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.”
The Social Security COLA has increased an average of 4.1 percent annually since 1975. There are only six years in which they were less than 2 percent. There were no increases in 2010 and 2011 because inflation was too low.
(Gannett file illustration.)
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