The average monthly social security payment that will be made to senior citizens and others that receive this entitlement for 2017 will be $1360 per month. This is an increase of only .3% from 2016.
This is yet another very small increase in social security payments, and this has been a pattern going back to 2008. While this increase in payments will mostly flow to senior citizens, there are millions of other people, such as the disabled or children, who will also benefit from the annual COLA.
While it may be hard to believe, the good news is that this Cost of Living Increase is actually a slight improvement from some of the most recent past years. As for calendar year 2015 as well as 2016 the monthly social security payments did not increase at all! So while .3% is a minimal increase, at least the amount being paid out is going up for 2017.
It is expected that about 20% of the population of the United States (or about 70 million seniors, disabled, etc.) will get a bump in their payments. Since it is a safety net program for some of the most vulnerable in the nation, this is why many more people other than seniors are enrolled. So this .3% increase, even though it is minuscule, that will be given to millions of Americans is the good news.
Now the bad news. This .3% increase, which equates to about $4 per month for each beneficiary, will be offset by increasing costs of Medicare, primarily part B plans. So while the average senior citizen will be getting a little more money as the result of COLA, due to the way the Medicare program works they may not actually receive a larger monthly check.
What happens is that the Social Security Administration automatically deducts the cost of Medicare Part B from the household’s monthly benefit check. And with the ever increasing cost of health care, the increase in programs such as Medicare has in the past (and probably will continue to in the future) wipe out any increase in Social Security payments.
Impact of social security increases
With tens of millions of senior citizens as well as retirees relying on their social security check for either their entire income or a large portion of it, these small increases are really starting to take their toll. Since 2008 there has not been one single year in which the increase has been greater than 3%. In fact, there have been three years in which there was no increase, and now for 2017 the cost-of-living increase will of course only be .3%.
This is making it very difficult for older and/or disabled families to keep up with the bills they are faced with paying. Many retirees are now struggling from the flat to no increase in this critical government benefit. While social security increases may be flat, there are other government assistance programs that seniors can apply to.
While the annual COLA increases are technically based on inflation (from the Consumer Price Index for Urban Wage Earners and Clerical Workers), this index is wide ranging. One of the main reasons it has been low over the last few years is the reduced price of gasoline. However with millions of seniors no longer driving, they do not benefit from that. Arguably the largest cost for senior citizens and retirees is the cost of medical bills, and the small increases in their annual checks are not keeping up with that expense.
There is not much a senior can do. The way for them to keep up during 2017 and in the future is to continue to cut back in their budget when possible, maybe seek a part time job, and really encourage future generations to save more money so that they are not faced with a similar situation in the future. As social security may not be there at all for kids being born today. Maybe today’s youth can see what is happening and take it to heart.