No Increase for Social Security Checks for the Next Two Years

August 24, 2009

Social Security officials project that there will be no cost of living adjustment or COLA for the next two years while premiums Medicare's prescription drug program are set to increase. It will be the first time that there will be no automatic increase since the adoption of social security benefits in 1975.

It is expected that a lot of elderly Americans will feel the effect of the non-adjustment of the cost of living. Around 50 million retired and disabled Americans receive Social Security benefits. This year, retirees get an average monthly benefit of $1,153.

There are also more than 32 million people are in the Medicare prescription drug program. From a $28 average monthly premium, it is set to rise to $30 in 2010, though it may vary by plan. People with Medicare Part B coverage for doctors' visits are expected to rise as well.

There are already calls for the Congress to increase Social Security benefits next year by 1% increase in monthly payments or a one-time payment of $150. But there are also those who say that Social Security recipients shouldn't get an increase when inflation is negative since consumer prices are down.

The law however mandates that Social Security benefits cannot go down. But according to the Social Security trustees' annual report this year, in 2016, the retirement program is projected to start paying out more money than it received and that if things don’t change, the retirement fund will be depleted in 2037.