If you're a recipient of Social Security benefits, you may have noticed an increase in your benefit amount at the start of the year. The average increase is about $140 per person, and it's adjusted annually to reflect the cost of living. This adjustment helps maintain the purchasing power of benefits and prevent erosion of the standard of living for the elderly and disabled.
The increase in benefits is one of the largest this year, at 8.7%. This Cost of Living Adjustment (COLA) is calculated based on inflation, which involves comparing price indices from the previous two years. You can learn more about this calculation on the Social Security Administration's website.
In addition to the increase in benefits, Medicare premiums decreased this year. For beneficiaries who pay their premiums directly from their benefits, they will see an additional increase of about $5, which is good news for those who rely on these benefits to make ends meet.
Overall, the annual adjustments to Social Security benefits and Medicare premiums are crucial for helping seniors and disabled individuals maintain their standard of living. By keeping pace with inflation, these adjustments ensure that benefits remain valuable and effective in supporting those who need them most.