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People who make resolutions on money matters tend to feel better about the state of their finances, said Ken Hevert, senior vice president of Retirement at Fidelity.
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Social Security recipients will get a 2% increase in benefits in 2018, which is slightly lower than projected this summer but up sharply from the past two years.

The cost-of-living adjustment (COLA) covers more than 61 million Social Security beneficiaries and more than 8 million recipients of Supplemental Security Income benefits. Some people get both.

The average person will get about $25 more per month.

The rate of the increase is tied to the Consumer Price Index, an inflation gauge.

The Social Security Board of Trustees had projected in July that this year’s increase would be 2.2%. While it fell short of that amount, it came after an increase of 0.3% for 2017 and no change in 2016.

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The hike is the highest since 2012’s 3.6%.

For upper-income retirees, the gains will be partially offset by an increase in the maximum amount of earnings subject to Social Security tax, which is jumping 1.2% to $128,700.

The government is also increasing the earnings limit for young recipients, above which benefits are reduced. The limit will rise 0.7% to $17,040 for people younger than 66, so their benefits will fall by $1 for every $2 above that amount that they earn.

The average monthly Social Security payment is $1,258, or about $15,000 a year.

Advocates for seniors claim the inflation index doesn’t accurately capture rising prices faced by seniors, especially for health care.

“It’s squeezing them. It’s causing them to dip into savings more quickly,” said Mary Johnson of The Senior Citizens League. “The lifetime income that they were counting on just isn’t there.”

More: Start planning for possible tax law changes

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More: Guess which workers stand to retire the richest

Some conservatives argue that the inflation index is too generous because when prices go up, people change their buying habits and buy cheaper alternatives.

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President Donald Trump has promised that his staffers will reduce federal spending by $10.5 trillion over 10 years. It may be a big challenge but President Trump plans to start the process by gutting social security.
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Past increases

July 1975 — 8.0% 
July 1976 — 6.4% 
July 1977 — 5.9% 
July 1978 — 6.5% 
July 1979 — 9.9% 
July 1980 — 14.3% 
July 1981 — 11.2% 
July 1982 — 7.4% 
January 1984 — 3.5% 
January 1985 — 3.5% 
January 1986 — 3.1% 
January 1987 — 1.3% 
January 1988 — 4.2% 
January 1989 — 4.0% 
January 1990 — 4.7% 
January 1991 — 5.4% 
January 1992 — 3.7% 
January 1993 — 3.0% 
January 1994 — 2.6% 
January 1995 — 2.8% 
January 1996 — 2.6% 
January 1997 — 2.9% 
January 1998 — 2.1% 
January 1999 — 1.3% 
January 2000 — 2.5%
January 2001 — 3.5% 
January 2002 — 2.6% 
January 2003 — 1.4% 
January 2004 — 2.1% 
January 2005 — 2.7% 
January 2006 — 4.1% 
January 2007 — 3.3% 
January 2008 — 2.3% 
January 2009 — 5.8% 
January 2010 — 0.0% 
January 2011 — 0.0% 
January 2012 — 3.6% 
January 2013 — 1.7% 
January 2014 — 1.5% 
January 2015 — 1.7% 
January 2016 — 0.0% 
January 2017 — 0.3% 
January 2018 — 2.0%

Contributing: Associated Press

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

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