Social Security benefits to see small increase in 2014
Published: Sunday, October 20, 2013
Updated: Sunday, October 20, 2013 22:10
Automatic adjustments to Social Security continue to rise, though at a smaller rate. Benefits in 2014 are projected to increase to roughly 1.5 percent, the Associated Press reported. The small increase provides more assistance to those who rely on veteran’s benefits and federal pensions, but not much.
“1.5 percent is not a lot either way,” Paul Minton, CEO of California Eastern Laboratories, said. “But for those who do not have much besides Social Security, it does provide modest help.” Minton and his wife, Judy, are nearing the age where they would be eligible for Social Security benefits.
2013's increase, which is based on the cost of living adjustment, or COLA, was at 1.7 percent, according to the Social Security Administration in January of this year. The adjustments have been low over the past few years with the recent adjustment being one of the lowest rates seen since the automatic adjustments were adopted in 1975.
The irregular increases can be directly related to the slow economy and, subsequently, to the low levels of inflation.
“The low rate of inflation determines directly the size of the annual increase in Social Security benefits,” Dr. Wayne Steger of the political science department said. “The formulas written into law in 1969 and amended through the years dictate that the CPI determines the annual increase in Social Security payments.”
The Consumer Price Index, or CPI, is directly related but not the only factor. The levels of inflation and consumer prices also factor into COLA. However, there are other components to consider such as the income levels of beneficiaries and the course of Social Security in years to come.
“1.5 percent is barely any increase at all especially at low income levels, this percentage increase generates only $17 a week. It is barely keeping them even,” Judy Minton, a consultant and former school administrator, said. “Having said that, given the budget pressure in Washington and the pressure to cut entitlement programs like Social Security, I don't that that it is very likely that a wholesale increase would get through Congress.”
Household income and the number of years that a person has paid into Social Security funds are also an element considered in the growth of automatic adjustments and how much a single person can receive, according to Steger.
Due to current trends, considering the route of Social Security and the government, it is far more likely that those in college now, or people retiring after 2033, will see a substantial decline in benefits and in adjustments.
The Social Security Administration indicates that nearly 58 million Americans rely on some form of Social Security Assistance. The increase will raise the amount of money received by veterans, workers and others who rely on the assistance by roughly $2.