The 63 million Americans who receive Social Security benefits will see a 1.5 percent increase in their monthly checks, the Social Security Administration announced Wednesday.
The average monthly Social Security payment to retirees and their survivors is $1,204, making the 1.5 percent increase worth a piddly $18.
That increase is among the smallest annual increase since the administration began indexing payments to inflation in 1975. The average annual increase since then is about 4 percent.
In 2013, Social Security payments increased 1.7 percent, after a 3.6 percent increase in 2012. There were no cost-of-living adjustments in 2010 or 2011.
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The COLA is based on the percentage change in consumer prices from the third quarter of one year to the same quarter of the following year. Consumer prices increased just 1.2 percent in September, the smallest increase since April. Still, medical care services, which make up a larger portion of retirees’ spending, increased 3.1 percent.
The Obama administration has proposed moving the cost of living adjustments from the Consumer Price Index to the less generous chained CPI. Chained CPI increases, on average, 0.25 percentage points below the existing metric.
The Social Security Administration also announced Wednesday that starting in January, the maximum amount of earnings subject to the Social Security tax will increase to $117,000 from $113,700. That change will mean that about 10 million of the estimated 65 million workers who will pay Social Security taxes next year will pay higher taxes as a result of the increase.
