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Social security checks are boosted significantly as inflation rises | News

Washington — 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 Wednesday’s estimate from the Social Security Administration, COLA will add $ 92 a month for the average retired worker, as is commonly called. This is a sudden break from the long-term decline in inflation, with living cost adjustments averaging only 1.65% per year over the last decade.

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.

However, it is only to compensate for the rising costs that recipients are already paying for food, gasoline and other goods and services.

“It goes pretty fast,” retired Cliff Ramsey said of rising living costs. After a sales career at a major steelmaker, Ramsey lives near Hilton Head Island, South Carolina. He takes care of his wife, Judy, who has developed Alzheimer’s disease for nearly 60 years. Since the coronavirus pandemic, Ramsey also said he occasionally mentioned wages paid to the caregivers who spell him out and increased prices for Judy’s personal care products.

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.

Among them is Kitty Ruderman of Queens, New York City. He has retired from his career as an executive assistant and has been collecting social security for about 10 years.

“We are waiting to hear what the increase will be every year, and every year it wasn’t that important,” she said. “Thank you for this year. It makes a difference.”

Ruderman says he’s taking time to shop for groceries to take advantage of the mid-week senior discount, but the price increase was still “extreme.” She says she doesn’t think she can afford the medicine recommended by her doctor.

AARP CEO Jo Ann Jenkins described the increase in government payments as “important for social security beneficiaries and their families to keep up with rising costs.”

Policy makers say this adjustment is a safeguard to protect social security benefits from loss of purchasing power, not an increase in retiree wages. About half of the elderly live in households where social security provides at least 50% of their income, and a quarter rely on monthly payments for all or almost all of their income.

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

When it’s time for social security, John Larson, chairman of the House Social Security Subcommittee and author of the law to address the shortfalls that prevent the program from paying full profits within 15 years. The lawmaker 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 Medicare’s Part B Premium, which they pay for outpatient treatment, is expected shortly. Since this is usually an increase, at least part of the social security increase will be consumed by healthcare.

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 for social security and Medicare, said he believes the current inflation surge will be temporary due to the extremely unusual economic conditions.

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

But policymakers shouldn’t delay working on retirement programs, she said.

“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. ..

Social security is covered by payroll taxes collected from workers and their employers. Each pays 6.2% up to the maximum wage. The cap is adjusted annually for inflation. Next year, the maximum income subject to social security payroll tax will increase to $ 147,000.

The argument still resonates. “Social security is my lifeline,” said Ruderman, a retiree from New York. “That’s what we’ve been working on.”

Copyright 2021 AP communication. all rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

Social security checks are boosted significantly as inflation rises | News

Source link Social security checks are boosted significantly as inflation rises | News

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