The increase is among the lowest since automatic annual adjustments were adopted in 1975. It reflects relatively low inflation over the past year.
At a mere 1.7%, Social Security will see its lowest increase ever come 2013. What does this mean for seniors today?
The COLA is the Cost Of Living Adjustment added to Social Security annually, based on inflation and increases in the Consumer Price Index (CPI.) For some seniors, planning for the new year means planning around the COLA and hoping for the best. Alternatively, a reduction or a weak increase in COLA may mean seniors will need to make up the difference out of savings. Nevertheless, the CPI is an imperfect indicator and a debated one as well.
This matter was taken up recently by USA Today in an article titled “Social Security benefits to rise 1.7% in 2013.”
In conjunction with the small Social Security increase and the uncertainty of taxes for next year, you may want to brush up on what could happen in 2013. A recent Forbes article titled “Social Security Benefits To Rise 1.7%; Workers Face Up To $2425 Payroll Tax Hike” may offer some knowledge on these very important changes. Seek appropriate counsel if you have further questions about your benefits.
References: USA Today (October 16, 2012) “Social Security benefits to rise 1.7% in 2013”
Forbes (October 16, 2012) “Social Security Benefits To Rise 1.7%; Workers Face Up To $2425 Payroll Tax Hike.”