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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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159 Comments
Barbara
November 27, 2013 at 7:48 pm

We, My Husband And I Have Not Even Recieved Any Letters From Social Security Telling Us Our New 2014 Benefit.

RICHARD
November 25, 2013 at 10:09 pm

I Just Want To Say: The reason Why The COLA DROP To 1.5 % There Are To Many Republicans In The White House, And Don't Like President Obama Because He's A Black Man. Now If He Would Have Been A White Man The Cola Would Have Been Anywhere From 4.5% To 7.5% Increase Or More. And I Say Every Election Day Each Year, Every Black Person Should Have There Black Hips Out To Vote Soon There Be No Republican In City State And Federal Government.

Peter-205
November 22, 2013 at 10:04 pm

Who the hell determined this COLA = 1.5% in 2014? Wise up to these guys 'cause 1.5% is a brazen lie. The 2014 COLA should be no less than 4-5 times higher.

Harold Jones
November 14, 2013 at 3:57 pm

If all is equal the cost of living should be between 5 to 7 percent that would be fair.

Harold Jones
November 14, 2013 at 3:42 pm

How is 1.5 fair when congress votes themselves a 3000.00 raise this year?what is wrong with this picture?

willie speight
November 13, 2013 at 7:33 pm

I PUT OVER 40 YEARS IN THE WORK FORCE AN ONE YEAR IN VIETNAM
FROM 10/23/1968 TO 10/23/1969 I WAS IN COMBAT INFANTRYMAN AN THIS
IS ALL THE COST OF LIVING WE ARE GETTING THIS IS NOT FAIR THEY DONT HAVE TO WORY WHEN THEY GET OUT OF OFFICE THEY ARE SET FOR LIFE WITH HEALTHCARE THE ONES WORK AND PAID THE TAX FOR THIS DAY
TO GET A SMALE AMOUNT FOR THE HARD WORK WE PUT IN ITS WRONG WE HAVE TO VOTE THE ONES OUT THAT CAUSE ALL OF THIS

Barbara
October 30, 2013 at 7:30 am

Probably because the cost of Medicare is going up, so you could actuall have a net Los.

Lillian Amyot
October 21, 2013 at 5:00 pm

For 2013 I am receiving 1120. a month. Today I got a letter from SS telling me my increase is 1.00 How is this possible when we are to get 1.5%?

Sincerely

Lillian Amyot

CG
October 21, 2013 at 2:39 pm

"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."

How is this good?? we put that money there from our paychecks! and now they are taking the cookies out of the jar that WE put in there!! This is NOT good for us that depend on this COLA allowance when the rent goes up by $30 every year! What are we the people getting out of lowering this? NOTHING!!!

Shelly
October 19, 2013 at 10:37 am

The real blood suckers are the spouses of CEO's and others who have never contributed a dime into the system but draw social security along with their spouse.

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