Social Security hike forecast to be 2.2%

Cost-of-living increase would be largest since 2011.

Millions of Americans who rely on Social Security can expect to receive their biggest payment increase in years this January, according to projections released Thursday by the trustees who oversee the program.

But older Americans shouldn’t get too excited.

The increase is projected to be just 2.2 percent, or about $28 a month for the average recipient. Social Security recipients have gone years with tiny increases in benefits. This year they received an increase of 0.3 percent, after getting nothing last year. The last time it was higher was in 2011, when it was 3.6 percent.

Some good news for seniors: The trustees project that Medicare Part B premiums will remain unchanged next year. Most beneficiaries pay $134 a month, though retirees with higher incomes pay more.

Both Social Security’s costof-living adjustment and the Medicare Part B premium are to be announced in the fall.

The trustees released the 2018 projections Thursday, along with their annual warning about the long-term financial problems of Social Security and Medicare, the federal government’s two bedrock retirement programs.

More than 61 million retirees, disabled workers, spouses and surviving children receive Social Security benefits. The average monthly payment is $1,253. Medicare provides health insurance to about 58 million people, most of whom are at least 65 years old.

Unless Congress acts, the trust funds that support Social Security are estimated to run dry in 2034, the same as last year’s projection. Medicare’s trust fund for inpatient care is projected to be depleted in 2029, a year later than last year’s forecast.

If Congress allows either fund to be depleted, millions of Americans living on fixed incomes would face steep cuts in benefits.

Neither Social Security nor Medicare faces an immediate crisis — they both have surpluses. But trustees warn that the longer Congress waits to address the programs’ problems, the harder it will be to sustain Social Security and Medicare without steep cuts in benefits, big tax increases or both.

A big reason why Congress doesn’t shore up Social Security and Medicare is that Democrats and Republicans don’t agree on the urgency of the problem. Many Democrats and liberals focus on the fact that both programs are funded for years to come.

“Opponents of Social Security may once again try to use this report as an excuse to cut benefits, including raising the retirement age,” said Max Richtman, who heads the National Committee to Preserve Social Security and Medicare. “We must, instead, look to modest and manageable solutions that will keep Social Security solvent well into the future without punishing seniors and disabled Americans.”

Republicans note that both programs face steep shortfalls as soon as their trust funds run out of money.

“With an aging population, our nation’s most critical retirement programs — Medicare and Social Security — are feeling an increased financial squeeze that puts their future viability at serious risk,” said Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee.