Social Security benefits seen just edging up

WASHINGTON -- Social Security recipients will get one of their smallest increases in monthly benefits come January.

Preliminary figures show the annual benefit boost will be just 1 percent to 2 percent, which would be among the lowest since automatic adjustments were adopted in 1975 and tied to inflation. Monthly benefits for retired workers average $1,237, meaning the typical retiree can expect a raise of $12 to $24 a month.

The size of the increase will be made official Tuesday, when the government releases inflation figures for September. The announcement is unlikely to please a big group of voters -- 56 million people get benefits -- just three weeks before elections for president and Congress.

The cost-of-living adjustment, or COLA, is tied to a government measure of inflation adopted by Congress in the 1970s. It shows that consumer prices have gone up by less than 2 percent in the past year.

This year's Social Security increase was 3.6 percent, after no increase the previous two years.

Some of next year's raise could be wiped out by higher Medicare premiums, which are deducted from Social Security payments. The Medicare Part B premium, which covers doctor visits, will rise by about $7 per month for 2013, according to government projections. The premium is now $99.90 a month for most seniors. Medicare is expected to announce the premium for 2013 in the coming weeks.

"It's useful to bear in mind that no other group in the economy gets an automatic cost-of-living increase in their income," said David Blau, an economist at Ohio State University.

Still, many feel like the COLA doesn't cover their rising costs.

"You have utilities go up, your food costs go up," said Janice Durflinger, a 76-year-old widow in Lincoln, Neb. -- AP