Updated 11:14 PM EST, Mon, Jan 18, 2021

Social Security Payments for 2014 Registers One of Lowest Increases since the 70s

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Social security beneficiaries across the United States will have to make do with their monthly payments, as their benefits marginally increase by 1.5 percent ($17) in January. It was one of the smallest increases registered in years, according to an Associated Press analysis.

The analysis reports that next year's raise will not be earth-shattering as 2012 consumer prices haven't increased much. It warns recipients, however, to manage expectations as they await the Labor Department's release of September's inflation figures. Only then can social security beneficiaries be able to know their cost-of-living adjustment (COLA), and predict the value of their January payments. Citizens blame the federal government shutdown for the delay of the report.  

The Social Security Administration defines COLA as a shield that protects the purchasing power of one's Social Security or Supplemental Security Income (SSI) from the ill effects of inflation. It is calculated based on the percentage increase in the year-on-year Q3 value of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Bureau of Labor Statistics determines the CPI-W percentage figure every year.   

COLA basically measures price movement among common commodities like food, housing, health care and education. If prices crawl up, then benefits will go up as well. The COLA impacts around 3 million disabled veterans, 2.5 million federal retirees and 8 million SSI beneficiaries.

Many seniors and non-profits, however, lament the COLA. Maryland senior David Waugh, in particular, told the Associated Press that while he's living comfortably above the poverty line, COLAs do not necessarily help much in covering unnecessary bills. "I live in a small apartment and I have an old car, and it's going to break down. And no doubt when it does, I'll have to fix it or get a new one," he told the Associated Press.

National Committee to Preserve Social Security and Medicare (NCPSSM) President and CEO Max Richtman also considers the COLA a letdown for not accurately reflecting seniors' expenses, a huge chunk of which constitute health care. "There are some things that become cheaper but they are not things that seniors buy," Richtman said in the same Associated Press report.

According to the Social Security official website, the payment raise value may either "partially" or "complete offset" by Medicare premiums increases.

Veterans and retirees, who comprise America's 58 million social security recipients, receive $1,162 monthly, on average. Last year's reported payment increase was 1.7 percent. 

This year's raise was among the six instances that Social Security increase registered below 2 percent. Since 1975, the year when COLA increases were automated, raises average at 4.1 percent. 

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