The Associated Press reports that seniors will receive a small (.3 %) increase in Social Security benefits in 2017. The increase adds up to about $5 a month for the average retiree. It is the smallest increase since the cost-of-living adjustments began in the 1970s. The increase will affect more than 60 million people — about 1 in 5 Americans. For retirees, the average monthly Social Security payment will be $1360.
Unfortunately for some seniors, even the small increase may be wiped out by an expected increase in Medicare Part B premiums, which are usually deducted from Social Security payments. By law, rising premiums for most Medicare recipients cannot exceed their Social Security cost-of-living increase. This is known as the “hold harmless” provision. However, new enrollees and high-income retirees are not covered by that provision, so they could face higher Medicare premiums, which will be announced later this year.
There was no Social Security benefit increase this year and next year’s small increase is due to low inflation. Even with low inflation, the small increase makes it especially difficult for seniors who count on every penny from Social Security.