In the latest official inflation report out from Uncle Sam on Tuesday, there is some good news for people who receive social security benefits. But, there is also some not good news.
The good news is that you’re on track for the biggest annual cost of living adjustment next year in over a decade. While the bad news is that it might not be quite as big as you thought it would be.
According to the U.S. Labor Department’s consumer price data for August, Social Security is on track to hike benefits 5.9% for 2022 when it makes the official announcement next month.
For those receiving an average benefit, an additional $88 per month is expected on top of the current $1, 486 benefit. But, if the COLA gets in at 5.9%, it is going to be lower than the estimated 6.1% or higher than what was being discussed before.
The lower figure is due to August’s official inflation figures coming less than what was expected which was heavily impacted by the ongoing COVID-19 pandemic that affected the prices of things like air travel and hotel tickets.
Every year, the Social Security COLA is resolved by looking into the consumer prices for July, August, and September then comparing the prices from the same three months during the past year.
For this year, July and August are running 5.9% ahead of the same months in the previous year. If September’s prices maintain the latest movement, then the recipients of Social Security benefits can bank on the percentage increase for the year 2022.
But, on the other hand, if the Delta Variant of the COVID-19 virus causes more slowdown this month, expect your COLA to be worse.
Non-profit organization The Senior Citizens League, which campaigns as a representative of seniors’ benefits, has updated their own forecast of 6 – 6.1%, lower than their previous forecast of 6.2%.
Report from the Commonwealth Fund which is a non-profit organization advocating better healthcare for everyone found that American seniors have been affected harder by the COVID-19 crisis compared to other high-income countries.
Some older Americans, 19% of whom, have experienced economic hardship brought by the pandemic. The fund’s latest survey showed that older Americans either lost their income or used up most if not all of their savings.
The statistic for Germany is only 3% and 10% in Great Britain. And if we were to break it down by ethnicity, the figures are even more shocking: 32% of Black Americans and 39% of Latin or Hispanic Americans have endured economic hardship brought by the pandemic crisis.