Social Security checks to get a tiny increase in 2017
NEW YORK– Social Security checks are about get a little bit bigger. Very little.
Checks for 66 million beneficiaries will rise between 0.2% to 0.5% in 2017. That works out to between $2.61 and $6.53 a month more for the typical retiree, according to the American Institute for Economic Research, a nonpartisan think tank.
The average retirement benefit check is currently $1,305.30, according to government figures.
This is by far the the smallest percentage increase of any year in which benefits did rise.
But it’s better than 2016, when Social Security checks didn’t increase at all. There have only been three years without any increase at all since Social Security’s cost-of-living adjustment was put in place in 1975 — 2010, 2011 and 2016.
In all three of those years, falling gasoline prices played a big role in capping inflation, which is the measure that Social Security increases are tied to.
The government won’t release the official cost of living adjustment until after the September inflation reading, which is due on Oct. 18. But the AIER’s estimates, which use government data, are typically on the mark.
The formula used to calculate Social Security benefits is somewhat flawed, since retirees typically do not drive as much as younger workers who commute to work. So they don’t benefit as much from the lower gas prices. And retirees often spend a bigger proportion of their money on health care, which has seen prices rise faster than overall inflation.
At the same time, retirees get hurt by low interest rates, since many depend on savings for at least part of their living expenses.