With days left to the National Elections, the topic of Social Security has entered further into the national consciousness. This was further enhanced by the recent announcement of a 0.3 percent increase for those receiving Social Security Benefits. This planned increase does not take place until 2017 but estimates of its impact on recipients are already being discussed.
Approximately 70 million Americans will receive this cost-of-living adjustment. Thus, it works out to approximately four dollars per individual bringing the average total to $1,230 dollars monthly. However, some recipients will have this increase countered by a rise in Medicare B payments. While any increase in Medicare cannot exceed the Social Security cost of living adjustment, under current law, for some participants in Social Security, such as new enrollees and those in higher income brackets, the provision does not apply. Therefore, when the new Medicare increases are announced, it is expected that they will see significant premium increases.
This cost-of-living increase is the fifth time that the percentage of increase will be below two percent. Since the Great Recession only once has the increase been two percent with three increases at zero percent. Determination of the exact percentage of any increase is determined by various factors as accounted for by the Bureau of Labor Statistics. These include expenses such as fuel, food, housing, clothing and more. By contrast, the current low inflation rate could partially reduce any negative impact for some participants.
While fuel prices have helped keep inflationary pressures at historic lows and thus the cost-of-living increase percentages low, there has been a steady increase in medical care costs of five percent. When this is considered with the fact that many senior citizens do not drive or drive often, the offset of low fuel prices is minimized while the impact on the monthly budget from health care increases. Therefore, placing a higher burden on those without supplemental income or those who also rely on investment income. Considering that recent moves by OPEC (Organization of the Petroleum Exporting Countries) to increase the price of oil, it can be expected that further minimization of low fuel costs will disappear, thus placing an even higher burden on already stretched monthly budgets for senior citizens, as least until the next calculation of a cost of living increase in Social Security.
Both candidates for President have made promises of not reducing benefits, however, the details are not forthcoming as to the specifics of how to maintain current funding levels or increasing funding, if any, to the Social Security Program. There is an increase in the annual wages subject to the Social Security tax being implemented next year with approximately 12 million workers expected to see an increase in taxes. However, this is to only maintain the current levels and does not address potential concerns with Social Security funding in the long term.
Kenneth G. Marks is an aggressive Social Security Disability attorney who will fight for you!
Phone: 949.239.7454, Fax: 949.748.6474