Typical Social Security check to get meager $3.92 bump next year

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

File image

NEW YORK — The typical retiree’s monthly Social Security check will get only $3.92 bigger next year.

That amounts to an increase of just 0.3% — the smallest ever put in place to help cover higher prices.

That’s still an improvement from this year, when the lack of inflation kept benefits from increasing at all. The average retiree’s monthly benefit is currently $1,305.30.

Social Security benefits go to 66 million people, including retirees, widows, orphans and people with disabilities. The annual cost of living adjustment was put in place in 1975.

Retiree benefits can be higher than average depending upon their earning history and how old they were when they began drawing checks. The maximum benefit today for someone retiring at full retirement age is $2,639 a month. Even that larger benefit check will grow by just $7.92 next year.

A drop in oil and gas prices has kept overall inflation in check in recent years. The benefits freeze in 2016 was the third time this decade that there has been no increase in benefits. The other years were 2010 and 2011.

Some have argued that the inflation reading used to calculate the adjustment is flawed because retirees typically do not drive as much as younger people who commute to work. So retirees don’t benefit as much from lower gas prices. Retirees also spend a bigger proportion of their money on health care, for which prices have risen faster than overall inflation.

At the same time, retirees are hurt by low interest rates because many depend on savings to cover at least part of their living expenses.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Notice: you are using an outdated browser. Microsoft does not recommend using IE as your default browser. Some features on this website, like video and images, might not work properly. For the best experience, please upgrade your browser.