Updated at 10 am EDT
More than 55 million Social Security beneficiaries will receive a 1.7 percent cost-of-living adjustment next year, the government said today.
The increase will be less than half of the 3.6 percent boost recipients received this year.
It will translate into an additional $21 per month for retired workers, according to the Social Security Administration, and bring average monthly benefits to $1,261.
Next year’s will be one of the smallest increases since 1975, when the government began providing automatic annual adjustments for inflation so that recipients don’t fall behind as prices rise. The adjustment is based on the increase in a measure of the consumer price index.
“Amid rising costs for food, utilities and health care and continued economic uncertainty, the COLA helps millions of older Americans maintain their standard of living, keeping many out of poverty,” AARP Executive Vice President Nancy Lea Mond said in a statement issued today.
Yet this adjustment means “millions of seniors who rely on their SocialSecurity for the basics like fuel, groceries and medical bills will once again find their expenses far outpacing their Social Security benefit,” according to a statement from the National Committee to Protect Social Security and Medicare, which advocates tying the Cost of Living Adjustment for Social Security to an index of costs affecting senior citizens, such as medical care.
“Given that the average senior currently receives just over $14,000 a year in Social Security, it’s hard to imagine how anyone can argue the current COLA is too generous,” said Max Richtman, president of the committee.
Congress should adopt the CPI-E which factors in the large health care expenses most seniors face, he says.