Oct 14, 2017 at 6:00 pm | Print View
Monthly Social Security checks will increase in 2018 by the most substantial amount in five years: 2 percent.
More than 66 million Americans receive Social Security payments. Most are seniors over age 65, but some payments also go to severely disabled people and orphans. The average check is $1,377 a month, meaning next year’s increase will raise it by $27 a month.
Nearly 1 out of 5 Iowans — most of them retirees — receive Social Security benefits, according to the AARP.
For nearly a third of Iowans over 65, that monthly Social Security check is the only source of income. For about the other two-thirds, Social Security accounts for half their income, the organization found.
For Sandy Lacoss of Woodstock, Vt., the federal pay bump can’t come soon enough.
“We need more money to live on,” said Lacoss, a 71-year-old retired cleaner. “My rent goes up every year. I really can’t afford it.”
Social Security checks rose 0.3 percent in 2017. In 2016, the checks didn’t go up at all, leaving many seniors saying they were struggling to keep up on their bills.
There hasn’t been an increase greater than 2 percent since 2012.
The raise is a cost of living adjustment — or COLA — that’s meant to keep up with higher costs of everything from rent to medications. But many seniors think the government’s calculations are flawed.
“If you polled seniors, 10 out of 10 would say the COLA is not keeping up with their costs,” said Gary Koenig, vice president of financial security for AARP.
Others say the COLA formula, which has been used since 1975, is fair.
“Seniors are not getting slighted,” said Charles Blahous, who served as the public trustee for Social Security and Medicare from 2010 through 2015 and is now a researcher at the Mercatus Center.
The COLA isn’t meant to be a merit increase, Blahous said. He notes that years where there’s been no increase are actually good for seniors because those were years when overall prices weren’t rising — or even fell, yet seniors don’t see the checks reduced.
The 2018 rise is larger partly because Hurricanes Harvey and Irma caused a jump in gas and other prices.
The Social Security Administration bases the COLA on a measure of inflation called CPI-W, a statistic that captures how fast costs are rising for workers.
Most seniors are retirees who no longer have jobs. Health care is their biggest expense, and it’s one of the fastest rising costs in America. Medicare Part B premiums are expected to rise in 2018, eating up much of the Social Security increase for some seniors.
Lacoss has rheumatoid arthritis and asthma. She gets dizzy sometimes and broke her arm a few years ago from a fall. Her doctor suggested she get a Lifeline, a medical alert system, but she asked him how she was supposed to pay for it.
“I wish I could go to work, but the doctors won’t let me,” Lacoss said. She lives off about $900 a month — $691 a month from Social Security and $207 from a pension — putting her just below the poverty line.
Social Security is a financial lifeline for many. The monthly payments lifted over 26 million Americans — including about 160,000 Iowans — out of poverty last year, according to the Census Bureau, making it the government’s most effect anti-poverty program.
President Donald Trump vowed during his campaign not to cut Social Security benefits.
Lacoss has already been informed that her rent payment is going up in December. With no children or spouse, she is on her own to make her meager budget work. She exhausted her savings paying for medical bills and car repairs in recent years. She’s thankful for a local food bank.
Her only splurge is her cat, Sassy Girl.
“She’s my buddy and I’m her buddy,” said Lacoss. “I’ll go without before she will have to go without.”
The Washington Post contributed to this report.