Every year in October, the Social Security Administration publishes data on the annual cost of living adjustment (COLA), which is calculated taking into account the figures from the Consumer Price Index for urban wage earners and administrative workers (CPI). -W).
This Wednesday, the Bureau of Labor Statistics published the latest inflation report which stood at 3.7% for the month of August, The consumer price index increased 0.6% last month taking into account that one of the highest costs was gasoline.
Following this latest data, it became clear that widespread inflation in the United States continues to be higher than the 3.2% annual COLA adjustment predicted by the Senior Citizens League. Therefore, Social Security benefit growth may be below this year’s 8.7%.
In this sense, experts consider that The figures may affect approximately 71 million Social Security beneficiaries that aims to keep up with the high inflation rate, which does not give in to the efforts of the Federal Reserve to bring it to 2%.
For the Social Security and Medicare policy analyst of the Senior Citizens League, Mary Johnson, despite the fact that this year there was an increase of 8.7%, one of the largest in 40 years, many retirees are still being left behindalso expressed that out of every 10 retirees, 7 claim that monthly expenses are 10% higher than a year ago.
“COLAs are intended to protect the purchasing power of older consumers, but because Social Security benefits are modest at best, the dollar amount of the boost often falls short of actual price increases during the year“Johnson told CBS.
The average senior in the United States continues to struggle with low purchasing power compared to high prices for housing, food, health care, among others. Only taking into account these three categories adds up to 80% of a retiree’s budget..
According to data from the Census Bureau, in 2022 the annualized poverty rate among older adults grew by 14.1% in the United States, compared to 10.7% in 2021 and 9.5% in 2022.
The Census report highlighted that “Inflation was so severe in 2021 and 2022 that average Social Security benefit fell behind by $1,054 leaving 53% of retirees doubting they will recover because household costs increased more than the dollar amount of their COLAs.”
Although the official calculations for COLA 2024 are not yet available, which will be published on October 12, everything indicates that it will be 3.2% according to the Senior Citizens League, in this case the average monthly benefit check for retirees would increase to $1,790, or $57.30 in additional benefits.
According to some calculations, the payments of the main four beneficiaries of Social Security would be as follows:
According to Johnson, “Social Security benefits are modest and replace about one-third of the average salary of a middle-income person,” Johnson said, therefore, It is estimated that 52% of retirees spend more than $2,000 per month.
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Source: La Opinion
