This year’s Social Security cost of living adjustment is likely going to be one of its smallest according to a USA Today story published on Monday, October 14, 2013.
Based on preliminary figures, the expected adjustment this year will be approximately 1.5%. The small increase is mainly due to the slow increase in the consumer price index, which is the primary driver behind the annual cost of living adjustment, or COLA as it is often referred.
If it holds true, the 1.5% increase will be one of the smallest since the annual, automatic adjustments became the standard in 1975. Those who are dependent on Social Security will likely be less than pleased, but with such a small amount of inflation, many government officials feel a negligible increase is justified.
Social Security dependents include a large segment of the U.S. population numbering close to 60 million. Besides retirees, there are disabled workers, children, and others who depend on Social Security benefits each month. An increase of only 1.5% will keep these individuals and families above water, but Social Security dependents are finding it increasingly difficult to stay afloat in these uncertain economic times.
"Social Security COLAs have been low and anybody who's trying to live off interest rates and getting returns on any of the meager savings they have is getting killed because there's no return on your CDs or other fixed income assets," said David Certner, of the AARP. "The one bright spot is that health care costs have slowed down. But at least on the income side, it has been a pretty tough few years in terms of trying to keep up with expenses."
2010 and 2011 had no Social Security COLA at all, due to low inflation. The increase in 2012 was 1.7% and while many wished it would have been higher, the increase was still welcome news following two years with no increases at all.
The precise amount of the increase will be known when the Labor Department releases its inflation report for September. The release of the report has been delayed due to the government shutdown.
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