What does the Social Security check boost mean for you?
MINNEAPOLIS – Tens of millions of Americans will see a big boost in their Social Security checks starting next year.
On Thursday morning, the Social Security Administration announced a cost-of-living increase of nearly 9%.
So, maybe you don't get Social Security yet. But, you very likely pay into it. And there's a good chance it pays out to your grandparents or maybe your parents each month.
Sixty-five-million Americans are Social Security beneficiaries, and three-quarters of them are seniors.
About 9% are children or widows or widowers of people who've died, and the rest - 14% - are disabled workers. Starting in January, all of these people will see an 8.7% increase. So what does that mean in dollar amounts?
"This is average because everyone's Social Security record is based on their own work life, right? But on average it means an extra $140 a month," said CBS News Business Analyst Jill Schlesinger.
The average monthly benefit right now is $1,547. Here's another average for you: Social Security covers about 40% of what people made before retirement. Congress used to give increases every few years. But back in 1975, lawmakers decided to make these jumps automatic and annual.
There have only been four years - back in the late 70s and 80s - where this number has been higher than what it is now. Back then, like it is now, inflation was high, and that's how this increase is calculated.
By law, Social Security averages the Consumer Product Index from the third quarter and compares that to the same time last year. Essentially it's how much the prices of things like food, gas, housing, cars, healthcare and more have changed over the year.
Because Minnesota is one of 12 states that taxes Social Security benefits for some people, here's the big question: Will it increase taxes for Minnesotans?
WCCO asked three experts about this. They say it may for some people, but everyone's situation is different. It depends on how close they are to the threshold, and how much other retirement income do they make.
It's really hard to tell, but what we can tell you is this: the increase is automatic. You'll get a notice in December telling you what your check will look like next year.
Another big question for retirees is medical costs, because they can often eat up the increases in Social Security. There good news here is that the premiums for Part B Medicare are down. So, people should see the full effect of the Social Security increase.
