Millions of Americans who rely on Social Security can expect to receive their biggest payment increase in years this January, according to projections released Thursday by the trustees who oversee the program.
But older Americans shouldn’t get too excited.
The increase is projected to be just 2.2 percent, or about $28 a month for the average recipient. Social Security recipients have gone years with tiny increases in benefits. This year they received an increase of 0.3 percent, after getting nothing last year.
Some good news for seniors: The trustees project that Medicare Part B premiums will remain unchanged next year. Most beneficiaries pay $134 a month, though retirees with higher incomes pay more.
Both Social Security’s cost-of-living adjustment and the Medicare Part B premium are to be announced in the fall.
The trustees released the 2018 projections Thursday, along with their annual warning about the long-term financial problems of Social Security and Medicare, the federal government’s two bedrock retirement programs.
More than 61 million retirees, disabled workers, spouses and surviving children receive Social Security benefits. The average monthly payment is $1,253. Medicare provides health insurance to about 58 million people, most of whom are at least 65 years old.
Unless Congress acts, the trust funds that support Social Security are estimated to run dry in 2034, the same year as last year’s projection. Medicare’s trust fund for inpatient care is projected to be depleted in 2029, a year later than last year’s forecast.
If Congress allows either fund to be depleted, millions of Americans living on fixed incomes would face steep cuts in benefits.
Neither Social Security nor Medicare faces an immediate crisis — they both currently have surpluses. But the trustees warn that the longer Congress waits to address the programs’ problems, the harder it will be to sustain Social Security and Medicare without steep cuts in benefits, big tax increases or both.
For example, in 2034, Social Security is projected to have a $546 billion shortfall, which would grow to more than $3 trillion in the first five years.
“Congress must act to ensure the long-term fiscal viability and sustainability and survival of Medicare and Social Security,” said Health and Human Services Secretary Tom Price. “There are a great many ways that the situation can be addressed. The bottom line is that it must be addressed.”
Republicans in Washington have long clamored to address the long-term financial problems of Social Security and Medicare, the largest benefit programs run by the federal government. But don’t expect them to do much about it.