On Friday, the Federal Government announced that there would be no rise in Social Security benefits next year. This will mark the second year in a row nearly 60 million senior citizens will not receive an inflation adjustment on their payments. According to CNNMoney.com, inflation has been low in the past two years and the Bureau of Labor Statistics reported on Friday that prices were up only slightly over last year. The article continues:
The last Social Security inflation adjustment was in 2009: Beneficiaries got a higher-than-normal 5.8% increase because of a temporary spike in energy prices in the third quarter of 2008.
Soon after, however, energy prices plummeted. Then the bottom fell out of the economy and by the third quarter of 2009 overall price levels had fallen 2.1% from the same period a year earlier. That meant no increase in 2010 Social Security benefit checks.
This year, while there has been some inflation, prices remain lower than they were in the third quarter of 2008 -- and that's the quarter that counts.
