Low Gas Prices Will Affect Social Security Payments

Nearly one fifth of the United States population relies on Social Security benefits to get by every month. For only the third time in 40 years those who rely on Social Security will not see a cost of living increase in their annual benefits. The reason is simple. Lower gas prices across the country have nullified the reason the benefits increase.

The cost of living increase is by law based on a government measure of inflation. The lower price of gasoline across the country has made the outcome of that measurement appear flat.

You can expect the government to announce the annual cost of living adjustment, or lack of one, on Thursday. This is when the Consumer Price Index for September is announced. According to one economist, prices in many other areas would have to show a significant increase to offset the lower fuel prices. The fact that prices for other goods and services have not seen those increases is leading many forecasters to predict the government will not add any increases to Social Security benefits at this time.

Social Security benefit increases were enacted by congress in 1975. This was during a time of very high inflation. For most of the past forty years those who receive Social Security benefits have seen that support increase by an average of four percent each year.