Social Security recipients to get cost-of-living raise of 5.9%, biggest since 1982

Social Security recipients to get cost-of-living raise of 5.9%, biggest since 1982

The Social Security Administration on Wednesday said this system’s virtually 70 million recipients will obtain a cost-of-living adjustment of 5.9% in 2022, the biggest improve since 1982.

The advantages bump is available in January after a 12 months of surging inflation, which has pushed up the fee of every part from meals to lease. Many seniors and others who depend on Social Security have struggled to deal with rising inflation this 12 months after receiving a mere 1.3% cost-of-living adjustment (COLA) final January, representing one of probably the most meager will increase in current historical past. 

The Social Security Administration usually pronounces its COLA within the fall, with the rise going into impact for December advantages which are paid in January. Which means beneficiaries will obtain a large annual “raise” in January 2022, however advocates are involved that seniors’ monetary ache could not abate if inflation continues to flare — which many economists count on to be the case, at the very least for the following a number of months. 

“There are a growing amount of estimates I’m seeing that inflation is going to continue into next year,” stated Mary Johnson, Social Security and Medicare coverage analyst on the Senior Residents League, an advocacy group. “I would not foresee that an almost 6% COLA is going to restore buying power if inflation continues into 2022.”

Inflation accelerated in September, with shopper costs growing 5.4% from the year-ago interval, barely quicker than their 5.3% improve the earlier month, the federal government stated on Wednesday. Core inflation — which strips out risky meals and vitality prices — grew 4.0%, the identical spike as in August. 

“Grim stories”

Inflation is inflicting some exhausting decisions for seniors, Johnson stated, noting that she has about 200 letters from Social Security recipients who’re experiencing some type of hardship. 

“I have nothing but these grim stories,” she added. “Food is one of the No. 1 issues we are seeing. Once they pay their rent and electricity they don’t have enough money to buy their groceries or their prescription drugs.”

About 4 in 10 seniors depend on Social Security funds as their sole supply of retirement earnings, according to the Nationwide Institute on Retirement Security. The standard month-to-month profit stands at about $1,262 in 2021 — an quantity that’s simply above the poverty line for a single individual. A 5.9% COLA improve provides about $75 a month to that profit.

Social Security funds had misplaced shopping for energy even prior to this 12 months’s larger inflation, the Senior Residents League estimated in an evaluation revealed earlier this month. Since 2000, authorities retirement advantages have misplaced 32% of their shopping for energy, the group discovered. 

The issue, in accordance to their evaluation, is that the Social Security Administration depends on an index known as the Consumer Price Index for Urban Wage Earners and Clerical Workers to set the annual improve for retirement advantages. That index does not embrace price will increase in Medicare premiums and it underweights the housing prices which are steadily skilled by seniors, as an illustration. 

“The index that is being used is for younger wage earners,” Johnson famous. “It doesn’t account for the buying patterns of older adults,” comparable to larger spending on healthcare. 

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