GOLDEN VALLEY, Minn. - The Social Security Administration is projecting a 2.2% cost of living increase for recipients next year. That's welcome news for the estimated 61 million Americans receiving benefits.
"The increase would be the largest since 2011," said Dan Ament, financial advisor with Morgan Stanley in Wayzata. It comes after there were no cost-of-living adjustments in 2010, 2011 or 2016. Ament said this increase would result in an additional $30 per month for the average retired worker.
The latest forecast does not change the year when the combined trust fund reserves are projected to become depleted, if Congress does not act before then; it's still 2034, the same as projected last year.
Ament tells us, for 2017, an estimated 171 million Americans are paying 6.2% of their wages up to $127,200. For someone who earns $127,200 or higher, they would contribute $7,886.40 for 2017. Those who are self-employed by a combined tax of 12.4%.
"Approximately one third of Americans claim early benefits at the allowed age of 62, but think carefully before taking your benefits early," Ament said. "Collecting Social Security benefits before your full retirement age can permanently reduce your benefit by as much as 30 percent. If you are working longer, don't need the money, or have a long life expectance, waiting after your'"full retirement age' will increase your benefits about 8% for each year you wait. Your maximum Social Security benefit depends on the age that you retire. It generally takes 10 years of work to qualify for retirement benefits. Your monthly benefit is calculated based on the 35 years in which you earned the most."
To find out more about your earnings history and projected benefits, you can visit the Social Security Administration's website.