In what happens to be the biggest adjustment for cost of living (COLA), social security retirees are set to receive a 5.9-percent boost in their 2022 benefits. This move comes after 39 years, amid the inflation burst while the economy tries to cope up with the ongoing pandemic.
Based on the Social Security Administration’s estimate, the COLA for a retired worker on average would be $92 for a month. This Wednesday’s data is a halt from the prolonged respite in inflation. The average cost of living was as low as 1.65 percentage/ year since the last decade.
With the current improvement, the estimate will now reach $1,657 per month for a retired worker next year. Likewise, couple’s benefits would also increase by $154 reaching $2,753 a month. However, this would just cover up for the growing prices of goods and services like gasoline, food, and others. Cliff Rumsey, a retiree, says that the cost of living increases pretty quickly.
Rumsey worked in the sales department for a famous steel manufacturer and now lives close to the Hilton Head Island in South Carolina. His wife, Mrs. Judy, 60, is an advanced Alzheimer’s patient and is the only one being taken care of by Rumsey.
Every 1 in 5 Americans’ household budgets has a direct impact of the COLA. Nearly 70 million people, including federal retirees, security recipients, etc., are among those facing the effects.
Baby boomers set to retire within the past 15 years will receive the highest ever increase so far. One among them is Kitty Ruderman from New York city’s Queens. She retired as executive assistance ten years ago and has been receiving Social Security since then. She says that the wait every year about the increase was futile, and the results were not significant. She added that the present announcement is going to make a difference.
Despite timing her groceries as per the midweek’s discounts for senior citizens, Ruderman says that the price hikes were acute.
Meanwhile, policymakers state that the adjustment is not a hike for retirees. Instead, it is a shield to Social Security benefits. Nearly half the people living in such households rely on Social Security for half of their income, while this is the complete monthly income for another quarter of people.
However, the COLA is only a part of the Senior Citizens’ financial equation annually. Medicare’s Part B premium is expected to be announced soon, which is generally an increase. Marilyn Moon, an Economist, hopes that the ongoing inflation is soon to end, owing to the dynamic economic scenarios.
Social Security usually gets the finances from workers and employees’ payroll taxes. The pay cap is adjusted as per the inflation each year. The financing scheme was President Franklin D Roosevelt’s magnum opus, who believed the program would be secured from political intrusions.
