The Social Security Administration announced a 1.7% increase to benefits in 2015. How far below normal was that? Join us and take a look at some historical information on Social Security benefit increases.
Thank you for joining us for another segment of Social Security Intelligence.
When the Social Security Administration released their changes for 2015, the news about the cost of living increase was met with lots of negativity. (pictures of headlines)
I’ll be the first to agree…1.7% is not much of an increase. That works out to a $20 per month bump for the average $1,306 benefit. But for perspective…let’s look at a brief history of cost of living adjustments.
The Social Security administration started inflation-based cost of living increases in 1975. Since then, the average has been right around 4%. However, this includes those massive numbers where inflation was extremely high. For example, the 14.3% increase in 1980 and the 11.2% increase in 1981. Those increases sure sound nice, but they were a result of something that wasn’t nearly as nice. Inflation was rampant. According to the Bureau of Labor Statistics, prices increased by 186% between 1968 and 1983. If the same were to happen today, you would be paying:
$1.40 for a postage stamp
$8.58 for a gallon of milk
$24 for a movie ticket
And that $5 footlong is now a $14 footlong.
With these numbers, it may be fair to exclude any increase that was a result of this hyperinflation. That takes us to a new average of 2.7% and that’s not that far away from what we received this year. And don’t forget, it could have been worse. There have been six increases that were lower than this year and that includes 2009 and 2010 where the inflation increase was……0%.
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