Social Security benefits have a COLA (Cost of Living Adjustment) feature that is tied to CPI (Consumer Price Index).
Earlier this year Social Security benefits were increased dramatically, over 6%, due primarily to the increase in energy prices the prior year. Energy prices make up a substantial portion of the CPI and due to the elevated prices in the prior year, recipients received a very large increase. If you have been at the pump lately, you know that energy prices have dropped dramatically this year, one of the primary reasons there is a plan for no COLA increases this year.
On a glass is half full thought, energy prices have lowered so much that the increase may even out our pocket books by not receiving an increase. Also, on a glass is half full thought, almost two years of increases were seen last year, so if we average the two years we would be receiving approximately a 3% per year increase.
For more information, see the Government website at http://www.ssa.gov/
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