Social Security lift won’t go distant for recipients

January 19, 2015 - photo frame

While this year’s 1.7 percent cost-of-living boost for Social Security recipients is one of a smallest in history, it still beats a 1.5 percent lift final year, and is a distant cry improved than 2010 and 2011 when there was no boost during all.

“Any boost is manna from Heaven. But how thespian it is in terms of assisting one’s financial conditions — it’s not a poignant volume of money,” pronounced Thomas J. Mackell Jr., former authority of a Federal Reserve Bank in Richmond, Va., and author of “When a Good Pensions Go Away.”

Robert Hapanowicz, boss of Hapanowicz Associates in Pittsburgh has his doubts as to either a boost will do many for recipients.

“The doubt is, ‘Is a Social Security boost gripping up?’ ” he asked. “Social Security was meant to addition retirement income. Back when it was started, a normal life outlook was lower. People live longer today.

“So, it’s expected those who rest on Social Security for a estimable partial of their retirement income aren’t gripping gait with those who continue to work.”

Social Security and Supplemental Security Income advantages are practiced annually by a Bureau of Labor Statistics to simulate a increase, if any, in a cost of vital as totalled by a Consumer Price Index.

While a purpose of a cost-of-living composition is to forestall a purchasing energy of a advantages from being eroded by inflation, how distant recipients widen those dollars mostly depends on their internal economy.

For instance, in a Pittsburgh segment where a Consumer Price Index for all civic consumers rose 1.1 percent from a initial half of 2013 to a initial half of 2014, a increasing spending energy will go a small over than in San Diego where prices picked adult 1.4 percent during a same time frame.

The compensate lift for many of a scarcely 64 million Americans who accept advantages will volume to reduction than $30 a month.

“Depending on their taxation situation, a boost could be minuscule. But each small bit helps,” Mackell said.

Pamela Villarreal, a comparison associate during a National Center for Policy Analysis in Dallas, is astounded that word premiums for Part B Medicare will not be going adult this year. That is customarily what happens when Social Security recipients get a cost-of-living increase.

She pronounced a cost-of-living boost typically is only adequate to cover an boost in medical premiums, so it customarily has no impact on improving a customary of living. For many seniors, Medicare premiums will sojourn during $104.90 a month.

“Even but a Medicare reward increase, a normal Social Security target is receiving about $1,300 a month, that amounts to about a $22-a-month raise,” Villarreal said. “It won’t have a large impact on seniors. But it beats a pointy hang in a eye.”

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