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Social Security recipients to get COLA raise of 5.9%, biggest since 1982

The Social Safety Administration on Wednesday said this system’s nearly 70 million recipients will obtain a cost-of-living adjustment of 5.9% in 2022, the most important enhance since 1982.

The advantages bump is available in January after a yr of surging inflation, which has pushed up the price of the whole lot from meals to hire. Many seniors and others who depend on Social Safety have struggled to deal with rising inflation this yr after receiving a mere 1.3% cost-of-living adjustment (COLA) final January, representing one of the crucial meager will increase in latest historical past. 

The Social Safety Administration usually proclaims its COLA within the fall, with the rise going into impact for December advantages which are paid in January. Meaning beneficiaries will obtain a large annual “elevate” in January 2022, however advocates are involved that seniors’ monetary ache could not abate if inflation continues to flare — which many economists anticipate to be the case, no less than for the subsequent a number of months. 

“There are a rising quantity of estimates I am seeing that inflation goes to proceed into subsequent yr,” stated Mary Johnson, Social Safety and Medicare coverage analyst on the Senior Residents League, an advocacy group. “I’d not foresee that an nearly 6% COLA goes to revive shopping for energy if inflation continues into 2022.”

Inflation accelerated in September, with shopper costs increasing 5.4% from the year-ago period, barely sooner than their 5.3% enhance the earlier month, the federal government stated on Wednesday. Core inflation — which strips out unstable meals and power prices — grew 4.0%, the identical spike as in August. 

“Grim tales”

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

“I’ve nothing however these grim tales,” she added. “Meals is without doubt one of the No. 1 points we’re seeing. As soon as they pay their hire and electrical energy they do not have the funds for to purchase their groceries or their pharmaceuticals.”

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

Social Safety funds had misplaced shopping for energy even previous to this yr’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 keeping with their evaluation, is that the Social Safety Administration depends on an index known as the Consumer Price Index for Urban Wage Earners and Clerical Workers to set the annual enhance 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’s getting used is for youthful wage earners,” Johnson famous. “It does not account for the shopping for patterns of older adults,” resembling larger spending on healthcare. 

https://www.cbsnews.com/news/social-security-benefits-cola-cost-of-living-2022-increase/ | Social Safety recipients to get COLA elevate of 5.9%, largest since 1982

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