By THE ASSOCIATED PRESS OCT. 22, 2014
WASHINGTON — Nearly 60 million Social Security recipients will get benefit increases averaging $20 a month in January, the third straight year of historically small increases.
The 1.7 percent cost-of-living adjustment will also raise government benefits for millions of disabled veterans, federal retirees and people drawing disability payments.
WASHINGTON — Nearly 60 million Social Security recipients will get benefit increases averaging $20 a month in January, the third straight year of historically small increases.
The 1.7 percent cost-of-living adjustment will also raise government benefits for millions of disabled veterans, federal retirees and people drawing disability payments.
The government announced the increase Wednesday when it released the latest measure of consumer prices. By law, the increase is based on inflation, which has been below historical averages this year. At the same time, the amount of wages subject to Social Security taxes is also going up.
Social Security is financed by a 12.4 percent payroll tax on the first $117,000 of a worker’s wages — half is paid by the worker and half is paid by the employer. Next year, the wage cap will increase to $118,500, the Social Security Administration said.
Congress enacted automatic increases in payments to beneficiaries in 1975, when inflation was high and there was a lot of pressure to regularly raise benefits.
For the first 35 years, the cost-of-living adjustment was less than 2 percent only three times. Next year, it will be less than 2 percent for the third straight year, and the fifth time in six years.
This year’s increase was 1.5 percent; the year before, it was 1.7 percent.
Social Security is financed by a 12.4 percent payroll tax on the first $117,000 of a worker’s wages — half is paid by the worker and half is paid by the employer. Next year, the wage cap will increase to $118,500, the Social Security Administration said.
Congress enacted automatic increases in payments to beneficiaries in 1975, when inflation was high and there was a lot of pressure to regularly raise benefits.
For the first 35 years, the cost-of-living adjustment was less than 2 percent only three times. Next year, it will be less than 2 percent for the third straight year, and the fifth time in six years.
This year’s increase was 1.5 percent; the year before, it was 1.7 percent.
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