Carmel, CA Social Security Payments To Rise Modestly (1.7%) In Januaryby Richard Kuehn on 10/18/12
For the second year in a row senior citizens will get an increase in their Social Security payments, although it's not much. Beginning in January, those receiving Social Security, military, retired federal worker and other government pensions will receive a 1.7% increase in their monthly payments due to a recent report calculating the inflation rate used to implement cost-of-living-adjustments (COLA). The number is tied to how prices rise on certain items between July and September compared to the prior year, and those numbers were released this week. The average Social Security check will rise by $21 to $1,261/month, although many people get much lower payments than that. Unfortunately, 1 in 3 seniors relies completely on Social Security for their income, so for them, this adjustment won't amount to much. The bad news is that this increase may be entirely wiped out by an increase in Medicare premiums. The 2013 increase for Medicare hasn't been announced but given the tiny cost of living increase (half of the 3.6% boost which was put through in 2012) it wouldn't be surprising to see this offset by an increase in the Medicare payment that seniors must fund out of their own pockets. Last year, seniors spent 12.2% of their annual income on health care, compared to just 6.7% for the general population. Many are skeptical about the way the CPI is calculated, it sure does seem as if gas, food, medical care and other things that seniors spend most of their Social Security check on are rising at a rate greater than 1.7%. Unfortunately, there's not much that they can do about it. In fact, the government has been talking about tying CPI increases to an index which rises less quickly than the current measure. That could be absolutely devastating to many of our poorest seniors.