Quote:America's retirees get biggest raise in 6 years

Quote:WASHINGTON — Millions of Social Security recipients and other retirees are getting a 2 percent increase in benefits next year--the largest increase since 2012. Still, that comes to only $25 a month for the average beneficiary.

The Social Security Administration announced the cost-of-living increase Friday. The COLA affects benefits for more than 70 million U.S. residents, including Social Security recipients, disabled veterans and federal retirees. That's about one in five Americans.

AARP gave muted praise to the 2 percent bump, saying in a statement that it "gives some relief to Social Security beneficiaries and their families who depend on their earned, modest benefits."

By law, the COLA is based on a broad measure of consumer prices generated by the Bureau of Labor Statistics. Advocates for seniors claim the inflation index doesn't accurately capture rising prices faced by seniors, especially for health care.
"
It's squeezing them. It's causing them to dip into savings more quickly," said Mary Johnson of The Senior Citizens League. "The lifetime income that they were counting on just isn't there."

Quote:In 2009, President Barack Obama persuaded Congress to approve one-time payments of $250 to Social Security recipients as part an economic stimulus package.

Over the past eight years, the annual COLA has averaged just above 1 percent. In the previous decade, it averaged 3 percent.
Johnson noted that multiple years of small or no COLAs reduces the income of retirees for the rest of their lives.

"Think about the length of a retirement period. Eight years is about a third of a (healthy) retirement," Johnson said.