Seniors who are on Social Security just got some good news.
On Friday, the government announced that Social Security checks will increase by 2 percent next year. The Washington Times reports that it is the first such increase in years.
Currently, more than 66 million individuals receive payments from the Social Security Administration. The majority of these Americans are seniors over the age of 65. According to The Washington Post, the average check is $1,377 per month. Next year, this amount will increase the payment by $27.
In 2016, the amounts being paid did not go up, but in 2017, the payments rose .3 percent. There has not been an increase greater than 2 percent since 2011.
The increase in Social Security payments is a cost of living adjustment (COLA) that is intended to keep pace with rising costs for things like medication and rent. However, some believe that the increases are not sufficient for the growing needs of seniors.
Gary Koenig, vice president of financial security for AARP told The Washington Post, ““If you polled seniors, 10 out of 10 would say the COLA is not keeping up with their costs.”
Others believe that the COLA formula used to calculate increases in payments is fair. Charles Blahous, a researcher at at the Mercatus Center said, “Seniors are not getting slighted.” Blahous was the public trustee for Social Security and Medicare from 2010 to 2015.
According to Blahous, COLA increases are not based on merit. Some years, when there was no increase, were positive for seniors because those were years when prices were decreasing or remaining stagnant. The payments were not reduced in those years, effectively meaning that seniors received a cost of living raise during a year where one wasn’t warranted.
The Social Security Administration bases its calculations for COLA on CPI-W, which is a method by which inflation is measured. It determines the rate at which costs are rising for workers. For seniors — most of which are retired — health care is the biggest expense. The cost for health care has risen rapidly over the past few years, with no sign of slowing down. In a short decade or so, the cost of procedures and other healthcare could again skyrocket.
On Friday, the government announced that Social Security checks will increase by 2 percent next year. Are we doing enough for our seniors?
The rising costs are making it more difficult for seniors to get the medical treatments they need to function. Many of these individuals are relying on Social Security for all of their expenses, as many of them are not employed. Buffing up the social security program is the Trump administration’s way of showing due respect to America’s seniors, extending to them the aide they so obviously deserve (and need).
The Census Bureau reported that these payments have taken over 26 million Americans out of poverty in 2016. “The income older Americans get from Social Security is critical in keeping them out of poverty,” Koenig told The Washington Post. According to the AARP, half of seniors receive 50 percent of their income from Social Security.
During the campaign, President Donald Trump promised that he would not make any cuts to Social Security benefits. This increase shows that the president has kept his word.