Upcoming changes to Social Security payments - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

Upcoming changes to Social Security payments

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Amarillo, TX - 56 million Americans will soon see a slight increase in their Social Security benefits, but some say it's only a drop in the bucket.

The Social Security Administration recently announced a 1.7% cost-of-living adjustment (see associated link), which translates to an additional $21 per month for the average recipient starting January 1, 2013.

The COLA is determined through a mathematical formula based on the Consumer Price Index, which the Department of Labor released Oct. 16 (see associated link), but some costs are not factored into that number, such as medical care.

Martha Chumley of the Amarillo Senior Citizens Association says rising healthcare costs all but nullify any increase in benefits, saying,

"It really doesn't help us that much because Medicare always goes up, and we end up with two to three dollars extra - the most we've ever received extra is five dollars, but there's been several years that we did not get an increase in our Social Security, and Medicare did go up.  So it really hasn't helped us all that much."

About 25 percent of households in Amarillo receive some form of Social Security benefits, and local financial experts say such a small adjustment is almost negligible, as Dale Buckner, an Amarillo retirement planning specialist says,

"I'm worried for my senior citizens that are retired right now in that the cost of living has gone up more than that, especially when you consider the cost of food is increasing at a more rapid rate than that; that's one of their bigger components, and also gas for their cars, transportation."

Also beginning January 1, American workers will contribute an additional 2 percent (6.2%, up from 4.2%) of their income to Social Security.

Since 1975, the COLA has been a mandatory component of Social Security - before that, it took an act of Congress to increase benefits.