Social Security beneficiaries take note: According to preliminary data, small benefit increases of between one and two percent are expected in 2013. The nation’s retired can expect to see their income rise between $12 and $24 each month – the lowest increase since 1975 when automatic adjustments began. Tuesday, the government is expected to confirm the size of the cost-of-living adjustments when it releases inflation figures for September.
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This year, the 56 million retirees receiving benefits saw a 3.6% increase in their benefits after two years of no increase at all. The 2013 figures are unlikely to please since the uptick could be canceled out by higher Medicare premiums, including Part B which expected to increase by $7 per month.
The cost of living adjustment, or COLA, is a government measure of inflation – and the report Tuesday is expected to show consumer prices have increased less than 2% over the past year.
But does COLA really matter? For the 65 and older voting bloc, it does. They were the only age group to see incomes rise from 2001 to 2011. During that ten year period, household incomes dropped 6.6% for every other age group. By contrast, those households headed by someone 65 or older, income rose 13%.
COLA is based on the CPI-W generated by the Bureau of Labor Statistics, which broadly measures consumer prices. Those numbers take into account price changes for food, housing clothing, transportation, medical care, recreation, and education. According to the BLS, in the last 12 months food prices have gone up 2%, housing costs by 1.4%, and gas prices by 1.8%. Meanwhile, home energy prices dropped 3.8%.