Social Security Administration (SSA) recently announced It’s increasing Social Security benefits next year, increasing monthly check amounts at the highest rate in nearly 40 years. However, as inflation continues to rise, this may not be enough.
social security said 5.9% increase Will take effect at the end of December to achieve about 8 million Americans Supplemental Security Income (SSI) benefits, and a cost-of-living adjustment (COLA) due in January 2022 for another 64 million Americans. COLAs are determined using the Consumer Price Index (CPI) inflation measurement tool from the Bureau of Labor Statistics (BLS).
Although latest data The BLS shows the CPI grew 6.2% annually in October, highest inflation growth Since November 1990. If this 31-year high remains the same, the increase in Social Security benefits won’t be enough to cope. Inflation increase from this year alone.
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Kola rise may be too little, too late
Relying on COLA increases over the years has proved detrimental to Social Security beneficiaries, senior citizen advocates say, adding that the average increase in benefits each year simply isn’t enough.
“While higher COLAs are welcome, Social Security recipients are saying that years of low COLAs in the past made it impossible to cope with the raging 2021 inflation, because COLAs haven’t kept pace with the costs of some of the fastest-growing seniors.” Citizens League (TSCL) said in a statement,
Now, with inflation rising to 6.2 per cent annually in October, even this year’s new benefit amount may not be enough to cover the inflated prices faced by SSI beneficiaries.
“COLAs are intended to protect the purchasing power of Social Security benefits, but according to consumer price data as of July 2021, Social Security benefits accounted for nearly one-third of their purchasing power, since 2000, about the length of one Lost. Typical retirement,” said Mary Johnson, TSCL Social Security and Medicare policy analyst. “Worse, it appears that inflation hasn’t happened to us yet, and the purchasing power of Social Security benefits could run out in 2022.”
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Social Security recipients struggling with rising housing and health care costs
Advocates argue that the COLA may not be the best measure for costs incurred by seniors because there are many major expenses that are not accurately represented in the increase in inflation.
Johnson said, “Over the past 21 years, COLAs have increased Social Security benefits by 55%, but housing costs have increased by about 118% and health care costs have increased by 145% over the same period.” ” “These two categories have not been adequately included in the COLA specifically.”
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