For the third straight year, millions of people receiving Social Security benefits will see a cost-of-living adjustment (COLA) in their monthly benefit. On October 22, 2014, the Social Security Administration (SSA) announced a 1.7% increase for 2015.
According to SSA, the average monthly Social Security retirement benefit will increase by $22, up from $1,306 in 2014 to $1,328 (or $15,936 per year) in 2015. The average monthly benefit for a Social Security “disabled worker” beneficiary will increase by $19, from $1,146 in 2014 to $1,165 in 2015.
More than 70 million people receive benefits affected by the annual COLA. Those people include: retirees, disabled workers, their spouses and children, disabled veterans, federal retirees and their survivors, people with intellectual and developmental disabilities and more than 8 million people who get Supplemental Security Income, the disability program for the poor.
The cost-of-living adjustment is based on the Consumer Price Index (CPI), which measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.
Advocates for seniors say the government’s measure of inflation doesn’t accurately reflect price increases faced by older Americans because they tend to spend more of their income on health care. The rise in medical costs has slowed in recent years, but that may be little comfort to someone who is suddenly hit with a serious illness.
Older people on Medicare usually have their Part B premiums deducted from Social Security payments. The good news is that the premiums, which cover outpatient care, are scheduled to stay the same in 2015 – $104.90 a month. For more information on Medicare, please visit www.medicare.gov.