Social Security benefits tick up for 2015

Social Security benefits for more than 70 million people in the United States will rise by 1.7 percent next year, the government announced Wednesday, again well below pre-recession averages.

This marks the third consecutive year in which the cost-of-living adjustment (COLA) was less than 2 percent. The increase, however, is slightly higher than last year’s bump of 1.5 percent, one of the smallest the government had made since the mid-1970s.

{mosads}COLA is increased annually based on the Consumer Price Index (CPI) to ensure that Social Security and Supplemental Security Income (SSI) benefits aren’t eroded by inflation. The COLA increase will also apply to disabled veterans and federal retirees.

In 2010 and 2011, the COLA was not increased at all because inflation was too low. Since 1975, Social Security increases have averaged about 4 percent.

The National Committee to Preserve Social Security and Medicare scoffed at the tiny increase Wednesday, saying it would only amount to about $20 a month for the average senior.

“While there has been a lot of talk in Washington about the need to find a more accurate COLA formula; unfortunately, that attention has largely focused on ways to cut the COLA even further. If accurate inflation protection for seniors is truly our goal, Congress needs to adopt a fully developed CPI for the elderly,” President Max Richtman said in a statement.

Healthcare costs are outpacing the COLA increases, said Joseph Beaudoin, president of the National Active and Retired Federal Employees Association.

“The average 3.8 percent increase in health care premiums for federal employees and retirees in 2015 shows that medical costs continue to outpace the COLA as it is calculated presently,” he said. “We need a cost-of-living formula that doesn’t force these Americans to take one step forward, then two steps back.”

Beaudoin urged President Obama and Congress to adopt an alternative measure, the Consumer Price Index for the Elderly, that he says would more accurately reflect the expenses of Americans who are ages 62 or older.

The Social Security Administration said the COLA increase will take effect in January for 58 million program recipients, while more than 8 million people who receive SSI will begin receiving increased payments on Dec. 31. SSI is the disability program for the poor.