Social Security benefits to rise most in 7 years
Benefits for tens of millions of Social Security recipients and other retirees will tick up 2.8% next year as rising inflation boosts cost-of-living expenses, according to the Social Security Administration.
The increased payout is the second-largest increase in the last decade — when the cost-of-living adjustment peaked at 5.8% — but still only accounts for an added $39 a month for the average recipient. Benefits are expected to hit $1,461 a month on average for all retired workers next year, according to government data.
The administration bases the COLA on the U.S. Consumer Price Index, a broad measure of inflation and other metrics by the Labor Department’s Bureau of Labor Statistics.
The COLA extends to more than 62 million individuals as of January 2019. Other Social Security beneficiaries include disabled workers and surviving spouses and children.
Rising wages also drove up the taxable earnings threshold. Based on the increase in average wages this year, the maximum amount of earnings subject to the Social Security tax will jump to $132,900 in 2019 — up from $128,400 this year.