Social Security Is Not Expected to Rise

The New York Times reports:

For the first time in more than three decades, Social Security recipients will not get any increase in their benefits next year, federal forecasts show.

The absence of a cost-of-living adjustment, calculated under a formula set by law, will be a shock to older Americans already hit by plummeting home values, investment losses and rising health costs. More than 50 million people receive Social Security.

“Most seniors have never been through a year in which there was no Social Security COLA,” said David M. Certner, legislative counsel at AARP, the lobby for older Americans. Beneficiaries have received automatic cost-of-living adjustments every year since 1975. The increase this year was 5.8 percent.

In theory, low inflation is good for people on fixed incomes. But it is creating political and policy problems for Congress, which is just learning of the implications for Social Security and Medicare.

You'll want to read this one to find out about the Medicare surprise.