Social Security receivers are in line to get the largest cost-of-living raise in almost four decades, driven by a returning economy that is causing the biggest boost in inflation in years.
The Senior Citizens League, a group that centers on topics related to older Americans, says they estimate the change could be as much as 6.1%, given the June inflation numbers, which revealed that consumer prices in the month went up 5.4% from the year before, the fastest y/y increase since 2008.
The annual S.S. change is found given the CPI for Urban Wage and Clerical Workers, or also called the CPI-W.
Should Social Security receivers get a 6.1% boost to their monthly income in 2022, it would mean the biggest annual change since 1983, when they got a 7.4% bump. The Senior Citizens League said they expected the COLA for next year to be possibly 5.3% given the data from May.
“This is inflation on steroids, mostly caused by energy prices,” Mary Johnson, a Social Security researcher for the group, previously stated.
In 2021, recipients got one of the lowest COLA boosts, with a raise of only 1.3%, or around an extra $20 per month.
The estimated figure might still be going to change, and ultimately depends on the economy’s performance over the future months and if the Fed raises rates to fight inflation.
Chairman Jerome Powell hinted last week while speaking on Capitol Hill that central bank officials are not discussing pumping the brakes at any time in the near future, informing lawmakers that America’s economy is some “ways off” from where it must be for the Fed to start unwinding its monetary policies established during the pandemic.
The SS Administration will give the final change percentage in October.
Since 2000, benefits have lost around 30% of their purchasing power because of inadequate changes that underestimate inflation and increasing health care costs, as reported by the Senior Citizens League.
The group has urged Congress to accept legislation that would link the adjustment to inflation indexes for seniors, like the CPI for the Elderly, also known as the CPI-E. That index directly tracks the spending of people aged 62 and above.
Author: Scott Dowdy