Social security recipients to receive historic increase as inflation rises

The historic cost-of-living adjustment to social security benefits means 70 million Americans will have a better chance to keep up with inflation. 

So many have been making tough choices in their household budgets. The largest increase in social security benefits since 1981 will make the choices easier but not eliminate them entirely. 

Barbara and Bill O'Sullivan of Palm Harbor were at the Tampa airport to pick up one of their nine grandkids. 

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"We will take them to breakfast now and that will be the whole Social Security increase," said Bill O'Sullivan.

With an 8.7% cost-of-living increase, the average beneficiary taking in $1,681 a month will now get $1,827, an increase of $1,752 a year. 

Even after last year's jump of 5.9%, the 8.7% is the largest increase in more than 40 years, also a time of high inflation. Since inflation started rising as the world reopened from the pandemic, the O'Sullivans have slowed on dinners out.

"It's going to be very helpful," said O'Sullivan. "We will spend it now. It will be good for the economy. We are not going to put it in the bank, what does that do?"

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Experts said the cost-of-living increases are necessary because without it, social security benefits would be less valuable as the value of a dollar goes up.

"They have no other source of income," said Dr. Frank Bloch, a professor emeritus at Vanderbilt University Law School. "They can't get typically another job. They don't get a raise other than the cost-of-living increase."

The money is critical for Florida's economy, with 5 million people, or about a quarter of the state, receiving benefits.

Joan and Jim Romanello were also doing an airport pickup today. The money helps, but they're not writing any blank checks, especially with the cost of insurance rising.

"We are blessed," said Joan Romanello. "It's not the greatest. But we are blessed. We can make ends meet. We have our family."

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Along with 52 million retirees, there are 12 million people who receive disability benefits. Next year, the first $160,000 of income will be subject to social security taxes, compared to $147,000 this year.