Benefits for millions of Social Security recipients and other retirees will tick up 2% next year, according to the Social Security Administration.
The increased payout is the largest jump since 2012 — when the cost-of-living adjustment topped 3.5% — but still only an extra $25 a month for the average recipient. Benefits are expected to hit $1,400 a month on average next year.
The administration bases the COLA on the Consumer Price Index, a broad measure of inflation and other metrics by the DoL’s Bureau of Labor Statistics.
Rising wages will also drive up the taxable earnings threshold. Of the estimated 175 million workers projected to pay into Social Security in 2018, about 12 million will see higher taxes because of the increased ceiling, according to the administration.
By the end of 2017, nearly 62 million Americans will have received some $955 billion in benefits. The 2018 Social Security tax remains unchanged at 7.65%.
