Social Security checks are expected to increase next year by 3.7%, based on the June consumer inflation report, a new estimate shows.
A cost-of-living adjustment of 3.7% is down a full percentage point from last month's estimate as inflation cooled in June, mostly due to lower gasoline prices. Overall annual consumer prices rose 3.5% in June, down sharply from 4.2% in May. The core rate, excluding the volatile energy and food sectors, was at 2.6%.
An inflation decline this large in June is welcomed but unusual, analysts said. Whether inflation continues to cool is yet to be seen, they said. And much of, if not all, the COLA increase will likely be swallowed by expected increases in Medicare and drug costs, they said.