Social Security Benefits to Rise 2.6% in January

Elderly Americans will get a 2.6% cost-of-living increase in their Social Security benefits in January, the smallest increase in six years, the Social Security Administration said Friday.

The increase is the smallest since a 1.3% increase in 1987, which in turn was the smallest since 1975, when Congress ordered Social Security benefits tied to inflation.

The increase will average $17 a month, raising the average monthly benefit from $657 to $674. The maximum monthly Social Security benefit for workers retiring at age 65 will rise from $1,128 to $1,147. The increase will show up in Social Security checks received on Jan. 3.

Social Security benefits have risen automatically every year since 1975. This year, average monthly benefits rose 3% to $657.

The benefits increase is based on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers from the third quarter of one year through the third quarter of the next. This year, the increase was 2.6%.

Social Security Administration officials heralded the increase and low inflation rate as good news for beneficiaries.

“To the extent that low inflation benefits all Americans, it particularly benefits those on fixed incomes,” said spokesman Phil Gambino.

The American Assn. of Retired Persons said that the cost of living increase would help Social Security recipients keep pace with rising costs but would not cover their rising health care costs, which are currently running at more than twice the inflation rate.