Social Security increases can be offset by these 5 expenses – Community News
Social Security

Social Security increases can be offset by these 5 expenses

Social Security benefits will increase in 2022, but seniors may still struggle to meet their basic needs next year. (iStock)

Social Security benefits will increase by 5.9% in 2022, the highest increase in the past 40 years. Despite the high payments for tens of millions of Americans, experts say many seniors will likely struggle to keep up with their current expenses.

Experts argue that the annual cost of living (COLA) adjustments, based on the inflation measure of the consumer price index (CPI), do not accurately account for the spending faced by seniors.

“Over the past 21 years, COLAs have increased Social Security benefits by 55%, but housing costs have increased by nearly 118% and health care costs have increased by 145% over the same period,” said Mary Johnson, The Senior Citizens League Social Security (TSCL) and Medicare. policy analyst. “These two categories in particular are not adequately accounted for in the COLA.”

If you’re struggling to keep up with Social Security retirement benefits, consider taking out a personal loan while interest rates are historically low to help consolidate other high-interest debt. Visit Credible to compare lenders and find your personal interest rate.

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Important expenses seniors may struggle with in 2022

Even after the historic increase in Supplemental Security Income (SSI) payments revenues scheduled for Social Security beneficiaries next year, seniors may still struggle with the means to pay for certain expenses, including some basic necessities.

“COLAs are designed to protect the purchasing power of Social Security benefits, but according to consumer price data through July 2021, Social Security benefits have lost nearly a third of their purchasing power, 32%, since 2000, about the duration of a typical retirement,” Johnson said. “Worse, it looks like inflation isn’t over for us, and the purchasing power of Social Security benefits may continue to erode into 2022.”

Here are five expenses TSCL said retirees on SSI could struggle with in 2022:

  1. Food
  2. rent
  3. housing
  4. Warmth
  5. drug prices

Food

The United States Department of Agriculture (USDA) estimates that the cost of food will rise between 1.5% and 2.5% by 2022. The cost of eating out could rise even further, reaching 3% to 4% by 2022.

If you’re struggling to cover your expenses after your SSI payments, a personal loan is a convenient way to consolidate other high-interest debt and reduce your monthly payments. Visit Credible to compare multiple lenders at once and choose the one with the best rate for you.

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rent

Although rent increases came to a halt during the height of the COVID-19 pandemic, they could make up for lost time next year. TSCL found that rents will increase by 7% or higher, compared to the typical annual increase of 5%.

Owner housing

Tenants aren’t the only ones expected to struggle with the cost of lodging next year. Homeowners can also struggle, especially those who are planning to move or need to renovate their home. Mortgage rates and house prices are both expected to continue to rise in 2022. These higher house prices will lead to higher local property taxes and higher insurance costs for homeowners.

If you’re struggling with housing costs, a mortgage refinancing can help lower your monthly payments amid today’s historically low interest rates. Visit Credible to get prequalified in minutes without impacting your credit score.

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Heating the house

Due to rising demand and less stock, domestic heating oil and natural gas are becoming more expensive. The US Energy Information Administration expects the cost of heating a home to increase by about 21% to 25% this winter.

drug prices

Insurers appear to be gearing up for a surge in prescription drug prices in the coming year. The Centers for Medicare and Medicaid Services estimate that prescription drug premiums will rise nearly 5% by 2022, and the cash threshold before reaching the catastrophic coverage phase will grow by 7.6%, from $6,550 in 2021 to $7,050 in 2022 .

If your expenses increase in 2022 and your Social Security benefits are enough to cover the costs, using a personal loan to pay off debt can help you reduce monthly expenses. Contact Credible to speak with a loan expert and get all your questions answered.

Do you have a financial question, but don’t know who to ask it? Email The Credible Money Expert at: [email protected] and your question can be answered by Credible in our Money Expert column.