The Big Value of Small Increases

摘要

When social Security announced its latest cost-of-living increases, you could hear the yawns coming from all over. The benefit is going up 3.3 percent on Jan. 1, an average of $33 a month for single retirees, $55 for couples. Seems like no big deal. But if you crunch a few numbers, you see that it's a very big deal. No, not the 3.3 percent increase itself—but the fact that Social Security retirees have a benefit that's tied to the consumer price index and goes up every year. In fact, you can make a case that the inflation adjustment adds at least a third to the value of Social Security benefits for today's newly minted retirees.