Oct. 13 (UPI) — Monthly social security benefits will increase by 2 percent next year, officials announced Friday — the agency’s largest cost-of-living adjustment hike in five years.
Beginning in January, the Social Security Administration’s cost-of-living adjustment will cover more than 61 million beneficiaries in the United States.
Increased benefits to the more than 8 million supplemental income beneficiaries will also begin in December, although some recipients may get both.
Presently, the average benefit amount is $1,377 per month — meaning next year’s payments in that amount would rise by $27.
Gains for upper-income retirees will be offset by an increase in the maximum amount of earnings that can be taxed, from $127,200 to $128,700, the agency said.
Of the 175 million workers who will pay Social Security taxes in April, about 12 million will pay more due to the taxable increase.
Friday’s announced boost is the highest cost-of-living adjustment increase since 2012.
It is estimated that about half of Social Security recipients rely on the government payments for at least 50 percent of their income.
“The income older Americans get from Social Security is critical in keeping them out of poverty,” Gary Koenig, vice president of financial security for AARP, said.
Social Security payments helped to bring 26 million Americans out of poverty last year. Healthcare is the biggest expense for seniors, a majority of whom are retirees who are no longer employed.