If you are living on a fixed income and were hoping for a decent cost of living increase in your Social Security payment for next year, forget about it.

The government reported that the 70 million who get these benefits will receive a 0.3 percent increase for 2017, but before you figure out what you are going to do with this newfound wealth of $4 or $5 a month, the government also said that the increase will probably go toward higher Medicare Part B payments, so that is likely to leave you with zero, nothing, zip.If it were not for the "hold harmless" law within the Social Security legislation, which decrees that Medicare payment increases cannot exceed the increase in the Social Security payment, seniors would wind up owing the government money.New enrollees coming into the system and high-income enrollees will likely face higher Medicare payments when they are announced next month.Since 1975, Social Security's general benefit increases have been based on increases in the cost of living, as measured by the Consumer Price Index or Cost-Of-Living Adjustment. Clearly, this COLA has lost its fizz.The average Social Security payment is now $1,238. With the increase, it gets nudged to close to $1,242 ($1,241.14, to be precise).Why this paltry amount, on top of no increase at all this year? Tame inflation, we are told. Well, I don't know where these so-called government statisticians are shopping, but it certainly is not at the grocery stores I frequent. I can assure you that my prices have gone up far more than 0.3 percent.We are told that energy prices are way down compared to a year ago. Gasoline prices have dropped by more than 6 percent, but what about medical costs, which have gone up by more than 5 percent and escalate even further in 2017?If you are a senior without a vehicle or don't drive, you do not get to see the gasoline price break, but most seniors can't escape the medical costs associated with aging.The Cost-of-Living Adjustment in 2012 was 3.6 percent; it dropped to 1.7 percent in 2013, 1.5 percent in 2014 and 1.7 percent in 2015. The 0.3 percent increase is the lowest since 1975, with the exception of several years when there was no increase, such as this year.Seniors are grateful to working Americans who have Social Security (FICA) taxes withheld from their paychecks and their employers who pay an equal amount. There is a 12.4 percent tax shared equally by employer and employee on annual wages of up to $118,500.This will increase to $127,500 next year, the Social Administration said, so the estimated 12 million employees earning more than that amount will pay an additional $558 in FICA taxes in 2017.Happy New Year!By Bruce Frassinelli |

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