Social Security Increase 2022: 5.9% increase in social security living expenses will be maximal in decades as inflation soars

Washington-Millions of retirees in social security will see a 5.9% increase in benefits in 2022. The biggest cost-of-living adjustment in 39 years follows a surge in inflation as the economy struggles to shake off the coronavirus pandemic resistance.

According to estimates released Wednesday by the Social Security Administration, COLA will be $ 92 per month for the average retiree, as is commonly called. This represents a sudden break from a long-term decline in inflation, with living cost adjustments averaging only 1.65% per year over the last decade.

With the increase, the estimated average social security benefit for retired workers will be $ 1,657 per month next year. The profits of a typical couple rise from $ 154 per month to $ 2,753.

“It goes pretty fast,” said retired Cliff Ramsey about the increase in living costs he saw. After a sales career at a major steelmaker, Ramsey lives near Hilton Head Island, South Carolina. At home, he takes care of his wife, Judy, who has developed Alzheimer’s disease for nearly 60 years. Since the coronavirus pandemic, Ramsey said he has focused on rising food prices, occasional wages paid to caregivers who spell him, and Judy’s personal care products, not to mention energy costs.

COLA affects about one in five Americans’ households. This includes social security recipients, disabled veterans, and federal retirees, for a total of about 70 million people. For the baby boomers who have begun to retire within the last 15 years, this will be the largest increase they have seen.

“It will be welcomed,” said Mary Johnson, an analyst at the nonpartisan Elderly Federation advocacy group. “But what we’ve heard is that even with COLA, prices continue to rise, reducing purchasing power.”

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Policy makers say COLA was designed as a safeguard to protect social security benefits from the loss of purchasing power in a constantly changing economy, not an increase in retiree wages. About half of the elderly live in households where social security benefits provide at least 50% of their income, and a quarter rely on monthly payments for all or almost all of their income.

“I don’t want to minimize the importance of COLA, regardless of the size of COLA,” said a retirement policy specialist who is a former public trustee helping to oversee the finances of social security and Medicare. House Charles Brahaus said. “What people can buy is greatly influenced by the number that comes out. We often talk about the necessities of life.”

This year’s Social Security Council reports that it has amplified warnings about the program’s long-term financial stability, but it has been consumed by President Joe Biden’s large-scale domestic agenda legislation and party tactics against government bonds. Little has been said about the parliamentary amendments that have been made with the attention of lawmakers. Social security cannot be addressed through the budget adjustment process that Democrats are trying to use to fulfill Biden’s promises.

But when it’s time for social security, John is the chairman of the House Social Security Subcommittee and the author of the law to address the looming shortage of programs that will not be able to pay full profits within 15 years.・ Rep. Larson said. At the same time that his bill raised payroll taxes, he changed the COLA formula to focus on medical costs and other costs that are heavy on the elderly. Larson said he intends to move forward next year.

“This one-time shot of COLA is not an antidote,” he said.

Biden’s domestic package includes a significant extension of Medicare to cover dental, auditory and visual care, but Larson said the elderly feel ignored by the Democratic Party. He said he was hearing from a member.

“At Town Hall and Teletown Hall,” I’m really happy with what you did with the child tax credit, but what about us? “Larson added. “In the midterm elections, this is a very important supporter.”

COLA is only part of the senior citizen’s annual financial equation. An announcement about Part B Premium for Medicare outpatient treatment is coming soon. This is usually an increase, so at least part of the social security increase will go to medical care. Part B premiums are currently $ 148.50 per month, and the Medicare Trustees Report estimates an increase of $ 10 in 2022.

Economist Marilyn Moon, who was also a public trustee in social security and Medicare, believes that the current surge in inflation is an adjustment to a very rare economic situation and that price restraint patterns will reassert over time. Said.

“I think it will increase this year, but it won’t be reproduced in the future,” Moon said.

Policy makers should not delay embarking on a retirement program.

“We are at a point where we do not respond to policy needs until people feel hopeless. Both social security and Medicare are programs that benefit from long-term planning, not short-term tactics.” She said. ..

Copyright © 2021 By AP communication. all rights reserved.

Social Security Increase 2022: 5.9% increase in social security living expenses will be maximal in decades as inflation soars

Source link Social Security Increase 2022: 5.9% increase in social security living expenses will be maximal in decades as inflation soars

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