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Social Security up 1.5 percent in 2014?

By Jennie L. Phipps · Bankrate.com
Monday, August 26, 2013
Posted: 5 pm ET

Plug this into your retirement planning budget for 2014: The Congressional Budget Office has estimated that the cost of living adjustment, or COLA, for 2014 will be 1.5 percent, slightly less than 2013's 1.7 percent. The official announcement will be made in the middle of October.

The COLA not only affects Social Security, it also sets the annual increases for federal retirees; Supplemental Security Income, known as SSI; military retirement, and veterans' pension benefits. Plus, eligibility for Medicare extra help, Medicaid and eligibility for federal and many state food and housing assistance programs also are tied to the annual COLA.

If you were receiving the average worker's Social Security retirement benefit of $1,224 in July, your increase, effective Jan. 1, would likely be $18.36 per month or about $220 a year. Don't spend it all in one place.

In his 2014 budget request, President Barack Obama proposed using a different COLA calculation, the chained CPI, as a way to help control the cost of Social Security. The House Republican Study Committee also has urged adoption of the chained CPI. With bipartisan support, there is a good possibility the chained CPI could become reality as early as 2015 -- it's too late for 2014.

If the chained CPI were to be implemented -- this is just a hypothetical -- the 2014 COLA increase would be about 0.25 percent lower, or 1.25 percent, in 2014. That would make next year's increase for the average Social Security recipient about $15 a month -- $3 lower than it will be with the current calculation. Over 10 years, the National Association of Retired Federal Employees estimates that the average Social Security recipient would lose a total of $240.

The good news is that the chained CPI would make a significant difference in the amount of money the federal government spends on Social Security. The Congressional Budget Office estimated in March that if the chained CPI were implemented in 2014, that it would save Social Security $127.2 billion from 2014 to 2023.

That's a step in the right direction.

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161 Comments
Jason
July 29, 2014 at 2:16 pm

I hope we get a bigger increase for 2015. The last good increase we had was in 2009 at that was 5.8%...two years after that we had nothing. The last couples of years we had a mere 1.5 or 1.7%. That's not much considering what the cola's have been in the past. I'd like to see these politicians live off what we do every month. There's no way they'd make it. Bigger increase for 2015! Doesn't Social Security take into fact that gas prices are up and food prices go up every year. What gives?

Ronald Bell
July 06, 2014 at 12:00 pm

Food is up gas is up we should get a 4% in our payment for 2015

Jeff B
April 09, 2014 at 5:46 pm

I wish they would have kept their little increase,it was just enough for them to substantially decrease the amount of extra help we had paying for prescription drugs now we are getting deeper in debt.But I guess they need it to stay involved in wars that gain nothing for us here at home.

CARL R CLENNY
February 05, 2014 at 8:05 am

I'M GRATEFUL FOR EVERYTHING BUT 1.5 % RAISE ON A FIXED INCOME IS A JOKE! ANYTHING WITH THE GOVERNMENT IS DESIGNED TO SUPPRESS YOU. YOU'LL "NEVER" GET AHEAD. I SAY DO WHAT YOU GOT TO DO TO SURVIVE.

Tammy
January 26, 2014 at 9:23 am

I am very grateful to receive. What ever Uncle Sam gives us we all should be counting our blessings. Some people in other Places don't get anything from their Government so stop winning.

Dee
January 25, 2014 at 2:10 pm

My daddy use to say give them a pencil and they want a pen. In other words their in office and so they want to run the world. Everyone knows if you have $5. In the bank and you take 10. Your in the red. Can't they figure that they give you 1.5 and just Medicare alone goes up by 15. Can't they see that with rent, gas, food and utilities all increase yearly your dipping more into what your were already getting without his BIG raise. So what is he really giving us. YET they gave all these stimulus packages to all these corporations for what so they could still file bankruptcy and keep that money too.

Stella
December 01, 2013 at 12:25 pm

I can't wait to get my $3 a month I'm going to get from the SS increase. Wow, so many plans I don't know where to begin.
Especially after they just increased my Medicare by $15 a month...then my rent will be increased because I am going to receive this GREAT BIG $3 increase monthly! Oh I am SO fortunate!

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