Countless Americans over the age of 60 live on Social Security. They don’t have pensions and 401ks. They believed that the government would provide for them in their retirement years as long as they paid into Social Security when they were young and working.
Social Security benefits still exist, for now. The problem is that with the inflation, the Social Security checks just don’t go as far as they used to. It’s led to countless problems.
If you go into any retirement community, you can hear the woes of the retired. They’ve had to re-enter the workforce so that they have enough money to make ends meet. They’ve had to rent out a room to be able to make rent. And for some, they’ve lost everything and are now discovering what it’s like to be homeless.
The government has to do something. Social Security is supposed to have cost of living adjustments (COLA). And anyone who depends on the checks knows that it’s a joke. COLA hasn’t been nearly what it needs to be to keep up with the rise in costs, especially with the inflation being seen in Biden’s America.
Now, a new estimate shows that there could be a 10.5% increase in payments starting at the beginning of next year. The Social Security Administration looks at the June reading for inflation. With a rise of 9.8% over the past 12 months, it’s enough to make anyone realize that it’s time to make some much-needed updates.
The Senior Citizens League is an advocacy group that is constantly looking at what retirees need to survive. The 10.5% increase could calculate out to be around $175 a month. The average benefit is $1668.
$175 extra a month is definitely a great addition. But, is it actually enough to cover the costs that seniors are having to endure? Not necessarily, especially if the current prices don’t get under control… and FAST.
This is where the league is particularly worried. In instances where retirees are renting, apartments are charging hundreds of dollars more per month. Then, there’s the cost of food, gas, and everything else. $175 wouldn’t even cover the escalated rent.
The Social Security Administration won’t release the official adjustment until October – and that’s because they’ll also be looking at the Consumer Price Index for Urban Wage Earners and Clerical Workers, also referred to as CPI-W. If there’s a jump for those working, there’s a jump for those who depend on Social Security – and there’s always a direct link.
There’s always the talk that Social Security won’t be around for too much longer. However, we’re all paying into it. So, it should reason that as long as everyone keeps paying into it, there will be plenty of funds. Unfortunately, the government dips into it as they please – and some people are getting benefits from it without ever paying into it.
There are plenty of groups estimating how much the jump in benefits should be for Social Security. The Committee for a Responsible Federal Budget is a watchdog group that says that their estimate is closer to an 11.4% adjustment due to the way the inflation trend is headed.
Regardless of how much it will be, it’s likely going to be a two-digit percentage increase – the largest that seniors will have seen since the early 1980s.
Mary Johnson, the policy analyst with The Senior Citizens League explains, “Inflation has been so high and so much higher than the 5.9% COLA that people got [in 2022], they have experienced a shortfall in their benefits. If people do not have adequate retirement savings or cash savings that they can easily get to, people are putting more on consumer credit cards.”
Additionally, many seniors had to deal with an increase in Medicare, leaving less than they were actually receiving from Social Security.
There’s good news for 2023. It looks as though there will be lower Medicare premiums. And, as a result of wage hikes for those who aren’t retired, there will be more payroll tax revenue in the Social Security trust fund.
Whether the COLA bump ends up being 10, 11, or even 12 percent, it will offer some financial assistance. Now, all we have to do is hope that the inflation gets under control fast so that retirees can hold onto their piddly bump from this year until they get a better bump next year.