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The biggest social security COLA in decades amid rising inflation | National News

Washington (AP) — Millions of social security retirees will see a 5.9% increase in benefits in 2022. The largest living expense adjustments in 39 years are: Inflation surge As the economy struggles to shake off drag Coronavirus pandemic..

According to estimates released Wednesday by the Social Security Administration, COLA will be $ 92 per month for the average retiree, as is commonly called.It marks a sudden break from the long calm of inflation seen Average living cost adjustment is only 1.65% per year The last 10 years.

With the increase, the estimated average social security benefit for retired workers will be $ 1,657 per month next year. The profits of a typical couple rise from $ 154 per month to $ 2,753.

“It goes pretty fast,” retired Cliff Ramsey said of the increase in living costs he saw. After a sales career at a major steelmaker, Ramsey lives near Hilton Head Island, South Carolina. At home, he takes care of his wife, Judy, who has developed Alzheimer’s disease for nearly 60 years. Since the coronavirus pandemic, Ramsey said he has focused on rising food prices, occasional wages paid to caregivers who spell him, and Judy’s personal care products, not to mention energy costs.

COLA affects about one in five Americans’ households. This includes social security recipients, disabled veterans, and federal retirees, for a total of about 70 million people. For the baby boomers who have begun to retire within the last 15 years, this will be the largest increase they have seen.

“It will be welcomed,” said Mary Johnson, an analyst at the nonpartisan Elderly Federation advocacy group. “But what we’ve heard is that even with COLA, prices continue to rise, reducing purchasing power.”

Policy makers say COLA was designed as a safeguard to protect social security benefits from the loss of purchasing power in a constantly changing economy, not an increase in retiree wages. About half of the elderly live in households where social security benefits provide at least 50% of their income, and a quarter rely on monthly payments for all or almost all of their income.

“I don’t want to minimize the importance of COLA, regardless of the size of COLA,” said a retirement policy specialist who is a former public trustee helping to oversee the finances of social security and Medicare. House Charles Brahaus said. “What people can buy is very much influenced by the number that comes out. Often we are discussing the necessities of life.”

This year’s social security trustees have reported amplified warnings about the long-term financial stability of the program, but little has been said about amendments in Congress, where parliamentary attention is being consumed. President Joe Biden’s large domestic agenda Legislative and partisan tactics National debt..Social security Budget adjustment process Democrats are trying to use it to fulfill Biden’s promise.

But when it’s time for social security, John is the chairman of the House Social Security Subcommittee and the author of the law to address the looming shortage of programs that will not be able to pay full profits within 15 years.・ Rep. Larson said. At the same time that his bill raised payroll taxes, he changed the COLA formula to focus on medical costs and other costs that are heavy on the elderly. Larson said he intends to move forward next year.

“This one-time shot of COLA is not an antidote,” he said.

Although included in Biden’s domestic package Significant expansion of Medicare To cover dentistry, hearing and vision care, Larson said he heard from members that older people felt ignored by the Democratic Party.

“At Town Hall and Teletown Hall,” I’m really happy with what you did with the child tax credit, but what about us? “Larson added. “In the midterm elections, this is a very important supporter.”

COLA is only part of the senior citizen’s annual financial equation. An announcement about Part B Premium for Medicare outpatient treatment is coming soon. This is usually an increase, so at least part of the social security increase will go to medical care. Part B premiums are currently $ 148.50 per month, and the Medicare Trustees Report estimates an increase of $ 10 in 2022.

Economist Marilyn Moon, who was also a public trustee in social security and Medicare, believes that the current surge in inflation is an adjustment to a very rare economic situation and that price restraint patterns will reassert over time. Said.

“I think it will increase this year, but it won’t be reproduced in the future,” Moon said.

Policy makers should not delay embarking on a retirement program.

“We are at a point where we do not respond to policy needs until people feel hopeless. Both social security and Medicare are programs that benefit from long-term planning, not short-term tactics,” she said. Said. ..

The biggest social security COLA in decades amid rising inflation | National News

Source link The biggest social security COLA in decades amid rising inflation | National News

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