Posted on 09/16/2016 11:34:17 AM PDT by JoeProBono
Although we are still a month away from an official announcement about the size of the annual cost-of-living adjustment (COLA) for Social Security benefits in 2017, the latest Social Security Trustees report projects a 0.2% increase in benefits next year.
That would boost the average Social Security retirement benefit of $1,341 per month by about $2.70 and increase the maximum benefit of $2,663 per month in 2016 by about $5.30 next year.
While that would be an improvement over this year when there was no inflation adjustment over 2015 benefit levels, a small COLA will do little to shield seniors' budgets from the specific type of inflation that they tend to experience compared to the general population.
The Social Security Act provides for an automatic increase in benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners (CPI-W). The COLA for 2017 would be based on the increase in the third-quarter average CPI-W for 2016 over the third quarter of 2014 (the last year in which a COLA became effective). The government will announce the Social Security COLA for 2017 in October.
Several senior advocacy groups, including the National Committee to Preserve Social Security and Medicare and The Senior Citizens League, support using a different inflation measure — the Consumer Price Index for the Elderly (CPI-E) — as the basis for future increases in Social Security benefits. It would require congressional action to change the inflation-adjustment formula.
“The current COLA calculation method doesn't fairly take into account the spending patterns of older Americans,” said Jessie Gibbons, a senior policy analyst at The Senior Citizens League. Younger people tend to spend more money on gasoline and electronics — two categories that have experienced price declines in the past two years — while older consumers spend more on health care and housing, which are more heavily weighted in the CPI-E, she said.
Based on inflation data through July, the government's CPI-E would result in a Social Security COLA of 1.5% next year, more than seven times the 0.2% COLA estimated by the Social Security Trustees in their 2016 report. In addition, while there was no COLA for Social Security recipients this year, the CPI-E data would have increased benefits by 0.6% in 2016.
The difference in COLA measures are usually small, especially at first, but the higher benefits compound over time. For example, someone who retired last year with a monthly benefit of $1,200 would receive about $20,300 more in retirement income over a 25-year retirement using the CPI-E, according to The Senior Citizens League estimates. This year the disparity between the two indices appears to be the highest on record driven by a spike in health care costs and higher housing costs, Ms. Gibbons added.
But the Social Security COLA is only part of the story. The size of the inflation adjustment will also affect how much seniors pay for their Medicare Part B premiums next year. About 39 million people, representing 66% of Social Security beneficiaries, have Medicare Part B premiums deducted directly from their benefit checks.
By law, the majority of beneficiaries are protected by a “hold harmless” rule that says their Social Security benefits cannot decrease from one year to the next due to an increase in Medicare Part B premiums. In other words, the increase in their monthly Medicare Part B premiums, which pays for doctors' visits and outpatient series, cannot exceed the dollar amount increase in their Social Security benefits.
The standard monthly Part B premiums for new enrollees in 2016 is $121.80. But due to the 0% Social Security COLA in 2016, the majority of Medicare enrollees continued to pay the 2015 premium amount of $104.90 per month. However, some beneficiaries do not qualify for protection under the hold-harmless provision, including high-income enrollees and those who do not receive Social Security benefits.
While the majority of Medicare beneficiaries would still qualify for protection under the hold-harmless rule in 2017, most would see a small Medicare premium boost next year if there is an increase in Social Security benefits. The premium amounts will vary.
For example, consider a Medicare Part B enrollee who currently pays $104.90 per month for Medicare. If this individual were receiving a Social Security benefit of $1,500 per month, then a 0.2% COLA would increase the benefit by $3 per month, meaning the Medicare premium could go up by $3 to $107.90 per month. But if that individual received a Social Security benefit of $2,500 per month, then a 0.2% COLA would mean a benefit increase of $5 per month and that enrollee's Medicare premium would increase by $5 per month to $109.90 next year.
A .02% raise ... well thank you ever so little
What a joke.
don’t worry -welfare rats will get three or four percent raise.
Just tell ‘em you’re Iranian and they’ll give you billions.
Seems like a slap in the face to me.
Since the vast majority of SS recipients are white, big media and Congress will just shrug their collective shoulders.
*** IN YOUR FACE AMERICA ***
Older folks are not important to Marxists.
and the govt pension people will see a big uptick, you can count on it....
A light increase in SS while I’m paying out more for Medicare than last year, negated that. Plus costs of everything is up. Net effect, less buying power. Good thing I’m not counting on my SS to keep me afloat. You young people out there need to prep for self support in old age, because old age will happen quicker than you think.
When I heard this percentage several months ago, I estimated my SS would go up about $2/month.
My rent is going up again, so it will total a $50/month increase for this year. And my Medicare Advantage started a $10 premium for the drug coverage part of the plan this year, when previously, it was $0.
Netflix went up about $2, so that takes care of the SS increase.
The inflation rate.
When food/fuel prices go up, they don’t count it.
When goes down they count it.
This is why Governments hate the Mob.
They hate the competition.
You get a few grand a month with social security meanwhile the gov’t worker gets 6 figures and gets to double dip the pension.
http://dailycaller.com/2015/10/06/california-doles-out-pensions-worth-at-least-100000-to-nearly-20000-government-retirees/
Former California State University, Sacramento president Donald Gerth retired in 2003 and received $305,002 in pension funds last year. University of California, Los Angeles professor Joaquin Fuster retired in 2002 and pulled-in $325,278. Former Solano County administrator Michael D. Johnson retired in 2011 and made the biggest bucks, earning a cool $375,990.
The average yearly pensions considering all 600,000 records averaged $85,724 for safety retirees, and $65,148 for non-safety government retirees.
“It’s particularly indefensible to force taxpayers to bear the entire cost for the recklessness of union-backed officials who gambled on sky-high investment returns, lost, and now expect taxpayers to bail them out,” Fellner said in the statement.
Remember this doesn’t just affect Social Security, this also affects Veterans as well. So Vets get a 0.2% increase or another slap in the face by this admin.
Your Medicare goes up as well,, so before the money ever gets to Netflix the government already dipped their bony paws into your till.
Many recipients will be eternally grateful: enough to pay a tip the next time they eat out.
Do the overlords not count higher food costs in the “COLA”? So many are too uninformed on this.
I’m uninformed on the formulas they use in calculating the “COLA”. I don’t care, as I know enough that the overlords twist and spin statistics and charts in order to fool many people with fake statistics. They probably don’t count food and fuel costs in the COLA, because the government doesn’t do so in calculating inflation. I don’t care about the stats, I do care about what I receive and the prices I pay for goods. Goods are always going up far beyond what the government says is happening with their “official” inflation figures. All lies and lack of transparency with this administration.
http://www.bls.gov/cpi/cpifaq.htm
Here is an excerpt from their FAQ:
The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
APPAREL (men's shirts and sweaters, women's dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).
There's a lot of other info there about exclusions. I don't know if the overlords are being honest, but it would appear that they have to follow this formula.
Why is that?
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