Social Security benefits to increase only 1.5%

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Social Security benefits change annually to adjust to the cost-of-living, however, in 2014, benefits will only go up 1.5%. That translates to around an extra $19 a month, and an average benefit of $1,294. Many worry that the adjustment will not be able to sufficiently aid the 57 million Social Security benefactors as costs for things like medical care and food continue to rise.

However, the small jump in benefits is most likely due to low inflation, and the Consumer Price Index for Wednesday showed that prices rose 1.2% in twelve months. Gas prices also took a 7.5% drop over that time period.

Currently, cost of living changes for Social Security are figured by looking at workers’ CPI. However, the Obama administration and some Congress members say that that system might change, and a chained CPI put in its place. That new method would allow spending trends to be tracked as prices go up, and the chained CPI adjusted accordingly. The switch would ultimately cause a reduction in benefit raises for Social Security recipients though.




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