2.1% Social Security Hike Is Smallest in a Decade

The nation’s 44 million Social Security recipients will get a 2.1% cost-of-living increase in their checks next year, the lowest such increase in a decade, authorities said Thursday.

The Social Security Administration’s announcement meant the average beneficiary’s check would grow by about $16, making it $765, said Commissioner Kenneth S. Apfel. The maximum check for retirees will rise to $1,342 from $1,326, based on a combination of factors, including the cost-of-living adjustment.

The average monthly payment to disabled workers will rise to $722 from $707. And the maximum monthly supplemental social security payment for 6.5 million elderly or disabled individuals with low incomes also will rise 2.1%, or $10, to $494.

That’s the second-lowest cost-of-living increase since the adjustment became automatic in 1975. The low was 1.3% in 1987.

“It is low, but that’s the direct result of low inflation,” said Apfel. “This low inflation is very good news.”

Cost-of-living adjustments are calculated by the Bureau of Labor Statistics based on the overall increase in the consumer price index.

The American Assn. of Retired Persons welcomed the announcement, calling the increase critical for many recipients to keep up with increased expenses, particularly the rising costs of health care.

One recipient, 77-year-old retired bricklayer Rufus Clayton, will get a monthly raise of $10.50.

“They give you a little increase,” said Clayton, who helped build the Pentagon. “But you can believe me, you don’t have . . . extra money on Social Security. I mean, you have to watch your budget and watch it close.”

Like about 15% of retirees, Clayton’s only income is from Social Security. Next year’s cost-of-living increase, announced Thursday, will push his monthly check to about $514.50.

He lives in a subsidized apartment for low-income elderly.

Separately, the Social Security Administration said that for 144 million working Americans, the maximum annual earnings subject to Social Security payroll taxes next year will rise to $68,400 from $65,400. Because the rate at which earnings are taxed remains at 6.2%, the maximum Social Security tax will be $4,241.