Social Security recipients across the US are to be granted a small cost of living increase next year, but it’s hardly the life-changing increment most will have been hoping for. Instead, you can expect an addition of less than 2% on top of your current payments – roughly half the size of the benefit increases added in 2012.
According to The American Institute for Economic Research, recipients can expect gains of around 1.5% to 1.7% on their Social Security payments in 2013.
October 16th will see the Labor Department publicize its latest inflation reading – the last of the 12 monthly readings that form the basis of all adjustments to benefit checks made each year. This will be the day upon which any increases to Social Security in 2013 will be announced.
For 2012, the increase in social security checks was 3.6%, largely due to a higher rate of inflation.
Speaking on behalf of the AIER, director of research Steven Cunningham warned that the smaller increases to be added in 2013 will for most be insufficient to cover the real-world cost of living increase the year brings. Seniors are in particular expected to be hardest hit, who collectively account for the lion’s share of Social Security checks paid across the US.
Cunningham argues that the way in which the government tracks sending and thus produces its inflation reports lacks balance and accuracy, as for the most part it relies on data attributed to the spending patterns of younger citizens, rather than retired seniors.
Among the various expenses expected to take their toll on seniors in 2013, he highlighted examples like gas prices which this year have already increased by 1.9%, food prices by 2% and medical expenses by 4.1%. Worked out as an average, the cost of living for senior increased by 2% in 2012 – significantly higher than the highest probable Social Security payments increase for 2013.
“They’re falling behind by about a half percentage point a year or so. It’s not a huge amount, but over time that adds up,” he warned.
An excessive spike in gas prices back in 2008 contributed to the large 5.8% Social Security increase for 2009, though this was followed by no increases at all coming into play in either 2010 or 2011 – years in which the recession was biting hard and spending fell back to comparative minimums.