Retirees receiving Social Security benefits are seeing a significant increase in their January checks. 70 million Americans are getting a 5.9% increase in their monthly benefit. This is the largest increase in 39 years. Since 1975, Social Security beneficiaries have received a Cost of Living Adjustment (COLA) based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Prior to 1975, increases in benefits only occurred with legislation. The 5.9% increase is a big jump compared to a 1.0% annual increase over the previous eight years. The average increase over the last 47 years has been 3.76%, however, the range of increases have been significant. In 1980 and 1981 the COLA increases were 14.3% and 11.2% respectively. At the other extreme, 2009, 2010, and 2015 had no COLA increase at all.
The increase in benefit is vital for many retirees who need to pay for the rising food, healthcare and other basic living expenses. According to AARP, 50% of Seniors rely on Social Security for half of their income. One quarter of Seniors depend on Social Security to cover 90% of their income.
Whether you are currently receiving benefits or preparing for retirement, we recommend creating an online account with Social Security by clicking here. At the My Social Security website, you can get an estimate of your future benefits or manage the benefits that you already receive.