Social Security COLA: Recipients to Get 1.5% More in 2014
Social Security recipients will see their benefits rise 1.5% next year thanks to annual cost-of-living adjustments, according to an announcement earlier today from the Social Security Administration. The Social Security COLA applies to almost 63 million Americans who receive either Social Security or benefits under the Supplemental Security Income program. For the average retiree, monthly benefits will rise $19 to $1,294. The COLA will take effect in January for Social Security recipients and on Dec. 31 for SSI beneficiaries.
The Social Security COLA announcement comes somewhat later than usual because the government shutdown delayed the Bureau of Labor Statistics' report on the Consumer Price Index for September, on which the annual cost-of-living adjustment relies. Inflation data became available this morning, allowing the SSA to calculate the adjustment.
In addition to benefit amounts, inflation also affects other Social Security-related figures. The maximum wage base on which Social Security payroll taxes are assessed will climb next year to $117,000 from the current level of $113,700. The SSA estimates that 10 million workers will pay more in Social Security taxes due to the inflation adjustment.
Certain thresholds will also rise. For example, the maximum amount that Social Security recipients younger than full retirement age can earn without forfeiting benefits will climb by $30 per month to $1,290.
The 1.5% rise continues a long string of smaller-than-average increases in Social Security benefits. Since 1975, Social Security COLAs have averaged about 4%, but low inflation in recent years has held back upward adjustments in monthly benefits. Last year, the SSA announced a 1.7% increase that took effect in January, and the increase of 3.6% the year before followed two years of no increases at all.
For more specifics on the Social Security COLA and other related inflation adjustments, visit the Social Security Administration's website here.
-- Material from The Associated Press was used in this report.
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