September 12th, 2016 | By: Mary Beth Franklin
Although we are still a month away from an official announcement about the size of the annual cost-of-living adjustment (COLA) for Social Security benefits in 2017, the latest Social Security Trustees report projects a 0.2% increase in benefits next year.
That would boost the average Social Security retirement benefit of $1,341 per month by about $2.70 and increase the maximum benefit of $2,663 per month in 2016 by about $5.30 next year.
While that would be an improvement over this year when there was no inflation adjustment over 2015 benefit levels, a small COLA will do little to shield seniors’ budgets from the specific type of inflation that they tend to experience compared to the general population.
The Social Security Act provides for an automatic increase in benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners (CPI-W). The COLA for 2017 would be based on the increase in the third-quarter average CPI-W for 2016 over the third quarter of 2014 (the last year in which a COLA became effective). The government will announce the Social Security COLA for 2017 in October. Read article here.