Wednesday, November 2, 2016

Low SSA Benefit Increase

Millions of retired Americans rely heavily on benefits from the Social Security Administration (SSA). It is not a whole lot of money, but it can prove to be useful for a number of yearly expenses, allowing people to not dip into their retirement savings. Retired Americans are not the only people who receive benefits from SSA, people with a disability (SSDI) and the impoverished (SSI) collect as well.

Unfortunately, there was not an increase in benefits in 2016 compared to 2015. However, in 2017, SSA benefits are going to increase by .3 percent, being the fifth year in a row of low benefit increases, Fortune reports. The insignificant increase is being attributed to low inflation in the United States.

It is important to keep in mind people who receive social security benefits get, on average, $1,238 per month, according to the article. Which means that .3 percent increase amounts to under four additional dollars per month. When you add to this matter the fact that Medicare Part B premiums are expected to increase in 2017, it means that the slight cost-of-living adjustment (COLA) will be canceled out by the higher Medicare premium.

“This loss of anticipated retirement income compounds every year, causing people to spend through retirement savings far more quickly than planned,” said Mary Johnson of the Senior Citizens League. “Over the course of a 25- or 30-year retirement, it reduces anticipated Social Security income by tens of thousands of dollars.”

Inflation being low in the U.S. is mainly the result of lower gas prices, the article reports. Over the last year, the price of gasoline has dropped by 18 percent. Naturally, most people smile about paying less at the pump, but not seniors necessarily. A large number of senior citizens do not drive anymore, so they do not reap the benefits of lower prices, yet it affects how much SSA pays out. On top of that, the cost of medical care has risen by more than 5%.

Here you can watch a short video on the 2017 COLA

Stephanie Merritt Driscoll is an attorney in Southern California who focuses her practice as a Social Security Disability advocate.

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