Record inflation continues to bite in social security checks
Record inflation continues to bite in social security checks

Record inflation continues to bite in social security checks

In January, social security recipients Received a 5.9 percent increase in cost of living (COLA) increase in their benefits. This increase, which was linked to inflation, represented the largest increase since the early 1980s.

Now have projections COLA number goes straight higher in 2023.

According to Fox Business, given inflation data for March, the COLA rise could be as high as 8.9 percent next year. COLA is calculated using a formula that uses the consumer price index for urban and office workers (CPI-W.)

“I have never seen my estimates as high as what I see right now,” said Mary Johnson, a Social Security analyst for the Senior Citizens League, in an interview with Fox Business. “The 8.9% would be the highest since 1981.”

The actual number will not be announced until October. And it is still possible that inflation may decline by the end of the year, thus lowering the expected COLA figure.

“Inflation means lower savings, and for people who do not have enough savings, it can mean higher debt,” Johnson said in the Fox Business interview. “And the rising interest rates, especially on consumer credit card debt, can be very expensive for people living on a fixed income and difficult to manage when they retire.”

In most years without high inflation, Social Security COLA is in the low single digits.

Meanwhile, CNBC reported this week that inflation has become so high that it has reduced the purchasing power of social security recipients.

Last year was the Senior League launched a petition to a new round of stimulus checks for seniors to deal with inflation, though it does not appear that the idea has gained ground in Congress. There have been no new stimulus checks since the enactment of the U.S. Rescue Planning Act in the spring of 2021, where inflation is often cited as a cause.

The petition called for an “emergency” stimulus payment of $ 1,400.

“I (and / or my spouse) want Social Security beneficiaries to receive a $ 1,400.00 emergency stimulus check to cope with this unprecedented year of inflation,” the petition said. “Social benefits are one of the few types of income in retirement adjusted for inflation. But rising inflation has taken a toll on household finances for retired and disabled social security recipients.”

The petition noted that in 2021, social security benefits increased by only 1.3 percent, raising the average benefit by only about $ 20 per month. But about 86 percent of social security recipients surveyed say their spending increased by much more than that amount. “

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and splice today . Co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Picture: Reuters.

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