Social Security recipients will see a 2 percent bump in their benefits next year, the largest raise for retirees since 2012, though still small by historical standards, the Social Security Administration announced Friday.
The annual cost-of-living increase is determined by taking the average rate of inflation from the third quarter of one year to the next, using the Bureau of Labor Statistics’ broad measure of prices for food, housing, clothing, transportation, energy, medical care, recreation and education.
With inflation low throughout the economic recovery, adjustments have been slight or non-existent. The 2 percent gain translates into an approximate $27-a-month increase for all retired workers, from $1,377 to $1,404.
The government also announced it will be taking more. It said it will increase the maximum amount of earnings subject to the Social Security tax to $128,700 from $127,200, starting in January.
More than 66 million Americans receive Social Security and Supplement Security Income payments, according to the agency.