Millions of Social Security recipients will be receiving fatter checks from the government starting in 2018.
The Social Security Administration (SSA) announced Friday morning that Social Security benefits would increase 2 percent to offset the rising costs of living.
The average amount a Social Security recipient would receive each month is set to increase to $1,404 in January—up by $27 from $1,377 a month.
According to the SSA, 62 million Americans are slated to receive $955 billion in Social Security benefits by the end of this year.
The 2 percent increase in benefits is the largest since 2012 when the government gave benefit recipients a 3.6 percent raise.
Beneficiaries only saw an increase of 0.3 percent at the beginning of 2017, and in 2016 recipients did not receive any increase.
Despite the increased government spending to cover beneficiaries’ expenses, some argue that the benefits hike is not enough to cover the rising costs of living.
“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,” said AARP CEO Jo Ann Jenkins in a statement Friday.
The money to cover the increased Social Security checks will come out of taxes, according to the SSA. The agency announced that the maximum amount of earnings that can be taxed for Social Security would increase to $128,700—up by $1,500 from $127,200.