Americans receiving a Cost of Living Adjustment (COLA) as part of their Social Security benefit will see the biggest boost in four decades, beginning January 2022.
The Social Security Administration announced the 5.9 percent increase on Wednesday, Oct. 13, 2021. Once in effect, more than 70 million retirees and people with disabilities may get an average of $92 monthly COLA to help with their rising expenses. So, if a retiree receives a monthly Social Security check for $1,560, his payment beginning 2022 will settle at around $1,652.
The last time this Social Security benefit had its biggest hike was in 1983, which ran up to 7.4 percent. Over the past decade, yearly COLA increases were in smaller increments, at 1.3 to 1.65 percent.
Read Also: Families to Get Third Child Tax Credit Payment; First Lady Jill Biden Pushes for Extension
Matches with Inflation
Nancy Altman, the president of the advocacy group Social Security Works, said that increase might appear to be substantial "on paper," but it simply matches the rising cost of living due to inflation. In an interview with CNN, Altman said that, in reality, an additional $92 might not be enough to cover the expenses of senior residents and disabled people.
More than 40 percent of Social Security beneficiaries depend on their monthly retirement checks for 90 percent of their expenses like gas, grocery items, housing, healthcare, and homecare. A recent survey from The Senior Citizens League showed that expenses among older Americans had ballooned during the pandemic year, especially for housing and medical costs.
American Association of Retired Persons (AARP) Chief Executive Officer Jo Ann Jenkins believes that the COLA increase is a step in the right direction. However, as Americans continue to experience the impact of the pandemic, she is asking lawmakers to work on protecting the seniors by creating policies and laws starting with the reduction of the prices of medicine and the expanded coverage of Medicare.
Social Security beneficiaries, however, will still have to account for the increase in their Medicare Part B premiums for 2022. Advocates said this would have a substantial impact on the COLA.
Currently, seniors and people with disabilities are deducted around $148.50 a month for their Medicare premium, a benefit they use for doctor visits and outpatient medical services. Experts project that a $10 increase in premium may likely be set for 2022. The agency will announce the actual increase sometime in November.
Calls for Fourth Stimulus Check for Seniors
Before announcing the COLA increase, The Senior Citizens League called on Congress and the Senate to distribute a one-time fourth stimulus check in the amount of $1,400 to the beneficiaries. The group has initiated a signature campaign, stating that this emergency benefit will help offset the cost of Medicare Part B premiums.
The group also asked lawmakers to change the COLA calculation based on the Consumer Price Index for the Elderly or CPI-E, instead of the current method based on the Consumer Price Index for Urban Wage Earners and Clerical Workers or CPI-W, since the former data is more accurate to their experiences and reality.
