Americans who receive Social Security benefits will soon see the biggest increase in their payments since 2012. In 2019, Social Security benefits are set to rise by 2.8%. This is the biggest bump since the 3.6% increase in 2012.
What it means for retirees
For the over 60 million Americans who receive social security benefits, the 2.8% increase will be a helpful boost. In recent years, social security benefits only rose by 0.3% in 2017 and 2% in 2018.
Although benefits are tied to inflation and the consumer price index some retirees will benefit more than others.
Who it benefits
If you’re a healthy, retired American who owns your own home and rarely drives, you’re less likely to be affected by inflation. This is due to the rise in inflation this year coming from gas prices, healthcare, and high rents. If you’re a renter, in poor health with a lot of medical care or someone who drives often, inflation will cost you a lot more.
Retired seniors who have to spend more of their money on rent, gas and medical bills often don’t have all of their expenses covered by social security.
The annual cost of living increase is calculated by taking the average rate of inflation from July through September and comparing it to the same time the year prior. The CPI-W is the index used to do this. The cost of living adjustments is meant to help counteract the negative effects of inflation on Social Security benefits and payments for retired seniors.
The average retiree receives $1,422 per month from Social Security benefits. This means that they will receive $1,466 after the increase in 2019. Couples who previously received $2,381 will receive $2,448 in 2019.