Tens of millions of Social Security recipients and other retirees will get a 2.8% boost in benefits next year as inflation edges higher, the AP reports. It's the biggest increase most retired baby boomers have gotten. Following a stretch of low inflation, the cost-of-living adjustment, or COLA, for 2019 is the highest in seven years. It amounts to $39 a month for the average retired worker, according to estimates released Thursday by the Social Security Administration. The COLA affects household budgets for about one in five Americans, including Social Security beneficiaries, disabled veterans and federal retirees. That's about 70 million people, enough to send ripples through the economy. Unlike most private pensions, Social Security has featured inflation protection since 1975. Beneficiaries also gain from compounding since COLAs become part of their underlying benefit, the base for future cost-of-living increases.
Nonetheless, many retirees and their advocates say the annual adjustment is too meager and doesn't reflect higher health care costs for older people. Federal budget hawks take the opposite view, arguing that increases should be smaller to reflect consumers' penny-pinching responses when costs go up. With the COLA, the estimated average monthly Social Security payment for a retired worker will be $1,461 a month next year. Retiree Danette Deakin, of Bolivar, Missouri, said she feels as though her cost-of-living adjustment is already earmarked for rising expenses, such as health care expenses, which she says eat up a third of her income. President Donald Trump has repeatedly vowed not to cut Social Security or Medicare. But the government is running $1 trillion deficits, partly as a result of the Republican tax cut bill Trump signed. Mounting deficits will revive pressure to cut Social Security, advocates for the elderly fear.
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