Social Security payments set for big increase. What to know.
NEW YORK (AP) — Tens of millions of older Americans are about to get what may be the biggest raise of their lifetimes.
On Thursday, the U.S. government is set to announce how big a percentage increase Social Security beneficiaries will see in monthly payments this upcoming year. It’s virtually certain to be the largest in four decades. It’s all part of an annual ritual where Washington adjusts Social Security benefits to keep up with inflation, or at least with one narrow measure of it.
Plenty of controversy accompanies the move, known as a cost-of-living adjustment or COLA. Critics say the data the government uses to set the increase doesn’t reflect what older Americans are actually spending, and thus the inflation they’re actually feeling. The increase is also one-size-fits-all, which means beneficiaries get the same raise regardless of where they live or how big a nest egg they may have.
Here’s a look at what’s happening:
WHAT’S THE BIG DEAL?
The U.S. government is about to announce an increase to how much the more than 65 million Social Security beneficiaries will get every month. Some estimates say the boost may be as big as 9%.
WHAT DO BENEFICIARIES HAVE TO DO TO GET IT?
Nothing.
WILL THIS BE THE BIGGEST INCREASE EVER?
No, but it’s likely the heftiest in 40 years, which is longer than the vast majority of Social Security beneficiaries have been getting payments. In 1981, the increase was 11.2%.
WHEN WILL THE BIGGER PAYMENTS BEGIN?
January. They’re also permanent, and they compound. That means the following year’s percentage increase, whatever it ends up being, will be on top of the new, larger payment beneficiaries get after this most recent raise.
HOW BIG WAS THIS PAST YEAR’S INCREASE?
5.9%, which itself was...