WASHINGTON, Oct 22 (Reuters) - The U.S. government will increase benefits for the swelling ranks of American retirees by 1.7 percent next year, the Social Security Administration said on Wednesday.
The agency expects to send out checks to around 64 million people in 2015. Most of these are pensioners, and the average monthly payment to a retired worker will rise $22 to $1,328. Disabled workers are also covered by the program.
America's society is aging rapidly as a bulge in the population born just after World War Two enters its twilight years. This is expected to stress public finances for decades to come as the government cuts more checks for pensions and healthcare bills.
The increase in benefits is based on Labor Department calculations of the rate of inflation, which has been tame in recent years. Benefits went up by 1.5 percent in 2014 and 1.7 percent in 2013.
The cap on earnings subject to Social Security taxes will also rise in January, based on the increase in average wages, the administration said.
Workers will pay Social Security taxes on earnings up to $118,500 next year, compared with a cap of $117,000 this year.
Of the estimated 168 million workers who will pay Social Security taxes in 2015, about 10 million will pay higher taxes as a result of the increase in the taxable maximum, the agency said.
(Reporting by Jason Lange Editing by W Simon)