Social Security recipients will soon receive the largest increase in their monthly benefits that they’ve seen in seven years.
The U.S. Social Security Administration announced in October that beneficiaries will receive a 2.8 percent cost-of-living adjustment, or COLA, next year.
As a result, a worker who was receiving $1,422 per month in Social Security benefits prior to the COLA would receive $1,461 after the COLA takes effect, according to Social Security Administration estimates. That’s an increase of $39 a month.
A couple receiving $2,381 before the COLA would receive $2,448 after. That’s a jump of $67 a month.
The COLA will take effect in January for more than 62 million people who receive Social Security benefits. It will take effect on Dec. 31 for more than 8 million people who receive Supplemental Security Income (SSI) benefits — income supplements for people who are aged, blind or disabled and who have little to no income.
The 2.8 percent increase for 2018 is the largest since 2012, when beneficiaries received a 3.6 percent bump. The COLAs for the past several years were:
- 2018 — 2 percent
- 2017 — 0.3 percent
- 2016 — 0 percent (no adjustment)
- 2015 — 1.7 percent
- 2014 — 1.5 percent
- 2013 — 1.7 percent
- 2012 — 3.6 percent
By law, COLAs are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers maintained by the U.S. Department of Labor. COLAs are meant to counteract the effect of inflation on Social Security and SSI payments.
To learn more about the potential perils of working and collecting Social Security payments before full retirement age, check out “Want to Work While Collecting Social Security? Be Careful.”
If you have yet to start receiving your Social Security benefits, check out “Maximize Your Social Security” to learn how you can obtain a personalized report on the best way to claim benefits.
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