Retirees Social Security Increase Expected to be Higher in 2018
The cost-of-living increase in the monthly check of Social Security recipients in 2018 is expected to be higher than in any of the last five years based upon data published in August and September. Signs are pointing to an increase of at least 2% for all Social Security recipients beginning in January, a significant difference over the 0.3% that was the increase in 2017.
The annual increase is based upon the difference in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the prior year to the corresponding quarter of the current year. The first two months of the third quarter of 2017 showed inflation increasing at approximately 2.1% in July and August with no indication of slowing down in September. If this trend remains, the CPI-W differential for the third quarter months from 2016-to-2017 will definitely be beyond 2% and will produce a cost-of-living increase for all Social Security recipients of at least that amount. The actual number for the third quarter of 2018 will be released by the Social Security Administration in mid-October.
If the numbers remain on the same course, the expected 2018 cost-of-living increase will be the largest since 2012, when the figure was 3.6%. Since that year, the increase in the cost-of-living adjustment for Social Security recipients has been:
It should be pointed out that increases in the cost-of-living index also means that there has been an increase in inflation, as the two factors go hand-in-hand. If inflation rises, the cost of goods and services increase; if the cost of goods and services rise, inflation rises. For a retiree, the cost-of-living feature of Social Security then allows the retiree to keep up with inflation and maintain an equal footing in the economy.