Social Security payouts increased 5.8 percent this year. It was the largest cost-of-living increase in more than 25 years and increased the typical retiree’s check by approximately $63.
But don’t count on a boost in payments next year. A Congressional Budget Office report predicts that there will be no cost-of-living increases for Social Security beneficiaries in 2010 through 2012. Although it’s more difficult to make accurate calculations farther into the future, CBO also projects that, after 2012, future cost-of-living adjustments will be less than 2 percent until 2019.
There has never been a year without a cost-of-living increase since annual adjustments began in 1975. Past adjustments have ranged from a whopping 14.3 percent boost in 1980 to just 1.3 percent in both 1986 and 1998. Increases are tied to the consumer price index, a measure of the prices paid by urban consumers for goods and services.
Current Social Security recipients will get a small reprieve this year, though. Beneficiaries will recieve a one-time $250 payment in May 2009, due to a provision in the American Recovery and Reinvestment Act of 2009.