New analysis shows that the amount seniors are paying out of pocket is much more than Social Security’s cost-of-living adjustment, which is supposed to rise in proportion to inflation. 2021’s adjustment was only 1.3 percent — and that’s a big problem considering the financial and economic instability of the last year and a half. The SSA’s estimated benefit increase was only a measly $20 for most people.
But The Senior Citizens League recently conducted an analysis based on Consumer Price Index information provided by the Bureau of Labor Statistics, and found that expenses are rising out of line with that adjustment.
For example, car and truck rental costs increased an awe-inspiring 31.2 percent from March 2020 to March 2021. Laundry equipment rose 24.2 percent, gasoline rose 22.2 percent, and home heating rose 20.2 percent. These are only a few costs that affect senior citizens more than the average Joe. If all these costs are rising so dramatically, 1.3 percent doesn’t cut it for most people.
A social security attorney can often help applicants reduce the amount of wait time — which is often compounded whenever social security administration officials find a mistake in the application filed.
Social Security and Medicare policy analyst Mary Johnson said, “With inflation rising so fast, what’s going on right now is an erosion in buying power.” She added, “If we see a continuation, we may see the highest COLA since 2008.”
That year, cost of living was adjusted a whopping 5.8 percent because of the Great Recession. But the average cost of living adjustment is only 1.4 percent.
The aforementioned issue was most important. It’s great that cost of living is tied to inflation in general — but maybe the SSA needs to reform to tie cost of living increases to the inflated costs of expenditures that actually matter to seniors. We won’t know how much this year’s adjustment will be until around October.
The majority of seniors believe that the SSA should provide minimum benefit increases each year, even if inflation would have resulted in a lower adjustment, according to a new poll.
The league wants Congress to reform the SSA to add one of these guaranteed increases annually, and use the Consumer Price Index for the elderly instead of the general population.
More seniors than ever before are deciding whether or not to retire early and claim social security before the maximum benefit is achieved. And the SSA doesn’t make claiming the biggest benefit easy. Claimants need to properly strategize before making the decision.