The nation's elderly and disabled Social Security recipients will receive a 1.5 percent increase in payments in 2014. This is expected to raise the average monthly payment for the typical retired worker by $19. The increase is even less than last year’s 1.7 percent cost-of-living adjustment (COLA).
According to the numbers recently released by the Social Security Administration, 2014 will be a “diet COLA” year. That means the Cost Of Living Adjustment (COLA) made to Social Security payments will only be a 1.5% increase.
ElderLawAnswers weighed in on the news in an article titled “Social Security Benefits to Rise Only 1.5 Percent in 2014,” while the SSA has issued its own COLA Fact Sheet.
The COLA is an important adjustment for many Social Security beneficiaries, especially those on a fixed income. These can be very important dollars and cents. If costs of living go up on an annual basis, then Social Security beneficiaries would be left with fewer dollars to purchase more expensive goods (and services) without the COLA increase.
On a positive note, this COLA increase is welcome. Historically, there have been years without any COLA increase. That noted, at 1.5% the 2014 COLA is still less than the 1.7% COLA in 2013, which some regarded as too low.
The math, as summarized by ElderLawAnswers, works out like this:
Starting in January 2014, the average monthly Social Security retirement payment will rise from $1,275 to $1,294 a month for individuals and from $2,080 to $2,111 for couples. The 1.5 percent increase will apply to both elderly and disabled Social Security recipients, and individuals who receive both disability and retirement Social Security will see increases in both types of benefits. The maximum Social Security benefit for a worker retiring at full retirement age, which is age 66 for those born between 1943 and 1954, will be $2,642 a month.
The good news is that it is not all bad news. While the SSA is seeing a lower COLA, it is worth noting that Medicare Part B will not be seeing an increase from the 2013 standard monthly premium of $104.90. In the end, then, for many beneficiaries 2014 might not be too unreasonable.
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Reference: ElderLawAnswers (October 31, 2013) “Social Security Benefits to Rise Only 1.5 Percent in 2014”