The annual cost-of-living increase in Social Security next year is projected to remain in record low territory, grim news for seniors dependent on those monthly checks to cover their expenses.
According to a forecast by the Senior Citizens League, based on the most recent consumer price index data, the 2015 boost in Social Security checks will amount to a meager 1.7 percent.
The Social Security Administration won’t be announcing its official rate of increase for beneficiaries until later in the month, but Senior Citizens League Chairman Ed Cates said in a statement that he didn’t expect the September CPI data to make much of a difference and predicted that “(t)he 2015 COLA will most likely be stuck in the low range of 1.6 to 1.8 percent.”
“That would make the sixth consecutive year of record low COLAs,” Cates said. “That’s unprecedented since the COLA first became automatic in 1975.”
The inflation index used to calculate COLA increases has been flat for the last five years, and therefore COLAs have followed along. Inflation has been growing at an average rate of 1.4 percent per year since 2010. The average was more than twice that, at 3 percent, for much of the 2000s.
Beneficiaries won’t be thrilled at the news, since they’ve been steadily losing ground in buying power. While their benefits increased by less than $19 a month in 2014, expenses rose by more than $119, according to a survey by Cates organization. A 1.7 percent increase in 2015 would only lift benefits by about $20 a month.
Since 2000, according to a study by the advocacy group, Social Security beneficiaries have seen a 31 percent plunge in their buying power.
What will make seniors even more unhappy is the news that Congress is still considering switching to the “chained CPI” as a means of reducing Social Security costs. Changes already made by Congress, since the late 1990s, to the methods by which COLAs are calculated have already lowered the measured rate of inflation by 0.7 percent per year, according to the Congressional Budget Office. Cates’ group supports the use of the Consumer Price Index for the Elderly.
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