Millions of Americans will get a boost to their Social Security checks next year.
The government announced a 2 percent increase to Social Security benefits Friday morning. The bigger checks aim to help offset rising prices.
The average monthly check is estimated to increase to $1,404 in January—a $27 increase from $1,377 a month.
Millions of Americans rely on Social Security to help make ends meet, and many have been struggling in the face of higher prices on essentials like health care, rent and food.
The Increase Applies To More Than Just Retirees
Not all of the recipients are retired workers—many are people with disabilities, or surviving spouses and children.
BREAKING: Social Security benefits to rise 2.0 percent in 2018, biggest increase since 2012.
— The Associated Press (@AP) October 13, 2017
Highest Increase Since 2012
The 2% increase is the highest since 2012 when Social Security recipients got a 3.6% raise.
At the start of 2017, recipients saw an increase of just 0.3%.
No Increase In 2016
In 2016, there was no increase.
Over the summer, the Social Security trustees had projected a 2.2% increase in benefits.
Around 62 million Americans will receive around $955 billion in Social Security benefits this year, according to the Social Security Administration.
Is The Cost Of Living Adjustment Enough?
The annual cost of living adjustment was introduced in 1975 and is based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-W tracks how much consumers pay for goods and services.
But some argue the increase is not enough to cover rising prices.
— Social Security (@SocialSecurity) October 13, 2017
“Today’s 2 percent COLA announcement gives some relief to Social Security beneficiaries and their families who depend on their earned, modest benefits. Since 2011, beneficiaries have received little to no increase—never more than 1.7 percent,”said AARP CEO Jo Ann Jenkins in a statement Friday.
She continued: “For the tens of millions of families who depend on Social Security for all or most of their retirement income, this cost of living increase may not adequately cover expenses that rise faster than inflation including prescription drug, utility and housing costs.”
“AARP continues our advocacy for bipartisan solutions to help ensure the long-term solvency of the program, as well as adequate benefits for recipients,” the statement concludes.
The Social Security Administration also announced the maximum amount of earnings subject to the Social Security tax will increase to $128,700 from $127,200.
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Story written by Kathryn Vasel for CNN.