Social Security checks are getting their biggest boost in six years

Retirees can expected the biggest increase in Social Security benefits in 2018 in six years.

Seniors who collect Social Security will get a 2% increase in their monthly checks in 2018, marking the biggest gain in six years.

The cost-of-living adjustment announced by the Social Security Administration is the largest since a 3.6% increase in 2012. Might not sound like much, but it’s a lot more than the nation’s 42 million retirees got in 2016 or 2015.

Seniors only got a 0.3% increase this year and none at all in 2015.

This year, the average beneficiary receives about $1,360 a month. A 2% increase in 2018 would amount to about $27.40 a month. Or an extra $326 for the full year.

Also Read: Nobel Prize winner Richard Thaler may have added $29.6 billion to retirement accounts

There’s a caveat, though. The higher cost-of-living adjustment is the result of higher inflation. At best seniors are merely being given enough extra cash to keep up with a rising cost of living.

In reality it probably not work out that way. Retirees tend to pay more for goods and services such as health care and housing whose prices have been increasing faster than inflation. They spend less on items such as gasoline or electronics whose prices often decline.

One study by the advocacy group Senior Citizens League contends Social Security benefits only buy about 70% of what they did in 2000.

For years the government has experimented with another index known as the CPI-E meant to more accurately capture how much the cost of living rises for the elderly. The index has shown somewhat faster inflation for seniors, but Congress has never really seriously considered adopting it because of budgetary worries.

The annual cost of living increase is determined by taking the average rate of inflation from July through September and comparing it the same period a year earlier, using an index known as CPI-W. The September CPI was released Friday.

Just a few months, the COLA increase was expected to range around 1.6% to 1.8%. Yet a sudden surge in inflation in August and September — triggered by hurricanes Harvey and Irma — will end up putting a few more dollars in the pockets of seniors next year.

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