Relief may be coming for Social Security recipients

SAINT PAUL, Minnesota – The latest consumer price index came out this week and overall inflation remains an issue, especially when it comes to food.

Despite gas prices falling 10.5% last month, food prices overall still rose 0.8%.

But why?

Well, some economists say that retailers may be reluctant to lower their prices because higher prices mean higher profits. In addition, labor costs are still high and many of the raw materials used for food production are still very expensive, such as fertilizers and cardboard.

The war in Ukraine also continues to impact grain production worldwide. That’s why products such as grains, flour and pastries all rose by 1 to 2 percent last month.

Egg prices also rose nearly 3% last month, after rising more than 4.3% in July.

We are also seeing a worrying shift in meat. Beef prices fell in June and July, but rose by 0.8% in August. The same is happening with pork, which rose 0.3% last month.

But if you’re in the market for a new television, the good news is that you’ll save about 20% compared to the same time a year ago. Airline tickets are also becoming cheaper thanks to lower gas prices.

And even more good news for those on Social Security, experts predict the biggest wage increase in 40 years. It’s not set in stone, but forecasts show that monthly payments are likely to increase by 8.7% in 2023. Tax preparers say the average American on Social Security will receive an additional $144 per month.

“The extra $100 to $200 a month will definitely go a long way for people,” said CPA Scott Kadrlik.

Kadrlik says he is already getting a lot of questions from seniors who hear this news. He says many are happy with the extra income, but they are also worried that this extra money will push them into a higher tax bracket.

“It probably won’t push you into a higher tax bracket and probably won’t cost you a significant increase in at least federal taxes,” Kadrlik explained.

He says the extra money will add up to about $1,000 to $3,000 over the course of the year and that’s not enough to affect most people.

If so, Kadrlik says the extra tax burden will only cost taxpayers a few extra dollars a year.

Social Security recipients here in Minnesota may also see another pay rise next year.

Minnesota is one of 13 states that still tax Social Security benefits, but lawmakers are thinking of getting rid of that.

Doing so would save the average senior a few thousand dollars a year, Kadrlik says.

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