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Social security of the year Cost of living adjustment (COLA) is not near enough to help boost seniors’ purchasing power. In fact, high inflation, according to data from The Senior Citizens League (TSCL), has caused Social benefits to lose 40% of their purchasing power since the year 2000.
In January, retirees saw a 5.9% increase in benefits for COLA, the largest in four decades. However, this increase still does not help seniors with rising costs as much as one might think. During the year ending March 2022, TSCL found that recipients experienced a 10 percentage point drop in their purchasing power.
The study compared Social Security COLA adjustments with increases in the price of 37 goods and services typically used by retirees. Mary Johnson, TSCL’s social security policy analyst, said the benefits were most affected by increases in energy costs for home heating, gasoline and higher food pricesas well as a 14.5% increase in Medicare Part B premiums in January.
The Ministry of Labor announced that consumer prices rose 8.5% for the year ending April, according to Money, but the rate of social security benefits was even higher – 8.9% in April and 9.4% in March. Johnson rated it COLA for 2023 will be around 8.6%.
Social benefits have increased by 64% since 2000, Money reports. Johnson found that spending on typical seniors increased 130% over the same period. This means that in order to maintain the same purchasing power from 2000, social security benefits must be $ 540 higher per month than they are right now.
“Retirees know all too well that social security benefits do not buy so much today like when they first retired, ”Johnson said. “To put it in context, for every $ 100 of goods or services that retirees bought in 2000, today they would only be able to buy $ 60 worth.”
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