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Your Social Security Increase for 2014

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The cost of living is rising in America, and along with it comes a Social Security increase for 2014. That's the good news. The bad news is that it's just a 1.5% increase for 2014. Still, more money is always welcome, and you can aim to make the most of the increase.

Let's get specific. In mid-2013, the average monthly Social Security benefit for retired workers was $1,269. That amounts to $15,228 per year. Up that by 1.5% and you get $19 more per month, for a total of $1,288 monthly or $15,456 over the year. The total average Social Security increase for 2014: $228.

In perspective
That's puny, for sure. But remember that it's the average. Many folks will actually be collecting a lot less, and many folks will gain more. Those who enjoyed maximum earnings over the years and retired in 2013 at age 65 would have collected a monthly benefit of about $2,414 last year, and they can expect to collect $2,450 in 2014. Thus, their 1.5% 2014 Social Security increase totals $36 per month, or close to $435 for the year.

Whether your Social Security increase in 2014 is $200 or $400, odds are, you won't even notice it. Your benefit check will be a smidge larger, and the cost of the things you buy will be a bit higher, too. It might have you wishing the increase were far larger, but remember that a far larger Social Security increase in 2014 would only happen if the overall cost of living surged as well. A glance at increases of yore shows a hefty 5.8% jump in 2009, but that was followed by two years with no increase. In 2012 we saw a 3.6% increase, but last year's increase was just 1.7%, not much more than the 2014 Social Security increase. In 1979, 1980, and 1981, the increases were, respectively, roughly 10%, 14%, and 11% -- but that's because inflation was in the double digits, too. (There's a case to be made, though, that the inflation rates used for Social Security increases are not always appropriate for retirees.)

Good news ... maybe
There actually is a way to feel less financially pinched in retirement, and it doesn't come from a Social Security increase in 2014 or any other year. It involves simply spending less. That might seem like a hardship, but studies are showing that as people age, they do spend less in retirement. After all, in retirement you no longer face commuting expenses and don't have to buy business attire. That's controversial, though, with plenty of experts arguing, reasonably, that many retirees simply have less to spend to begin with. Thus, their spending less isn't a choice.

It might be most accurate to see retirement as a series of phases instead of one long homogenous period. If you retire in your 60s, you might spend more in your first decade of retirement as you travel and take up hobbies. The next decade might be one of slowing down and staying home more -- while spending less. And then your 80s might feature some health issues that lead you to spend more again.

If you're not retired yet
If you're still many years away from retirement, look at the preceding numbers, assess the typical Social Security increase for 2014, and ask yourself how well such benefits would support you once you stop working. They might serve as a useful nudge to sock away more money now, in IRAs and 401(k)s or just in your regular savings and investment accounts.

And even if you are already receiving Social Security benefits or are close to doing so, you're not without options. Remember that you can still work while collecting Social Security, though earning more than certain limits will reduce your benefit. You can also delay beginning to collect Social Security. That increases your benefit by about 8% for each year you delay, until age 70.

Don't let a meager Social Security increase in 2014 have you worrying about your future. Learn more about Social Security and retirement planning options and make some smart decisions today that will give you a more comfortable tomorrow.

You can make Social Security do more for you
Social Security plays a key role in your financial security. In our brand-new free report, "Make Social Security Work Harder for You," our retirement experts give their insight on making the key decisions that will help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

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Selena Maranjian

Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter...

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