The Social Security Administration announced that recipients will receive a cost of living adjustment of 5.9% in 2022. This will make it the largest increase since 1982. The increase is because of the rise of inflation.
Social Security recipients still struggle with the cost of living
Everyone who receives Social Security, including retirees and disabled Americans, receives a cost of living adjustment every year. It’s set by a one-year increase in inflation and is aimed to help recipients when prices increase. This year, recipients saw a 1.3% adjustment, which gave them a $20 a month increase.
While it appears to be a rather significant increase on paper, it’s not enough for recipients who struggle to make ends meet. Right now, 40% of recipients depend on the monthly payments for 90% of their income. According to The Senior Citizens League, the COLA increase has not kept pace with the increase of prices of goods and services.
Living expenses have increased for the elderly
Social Security recipients have seen their expenses grow 105%. The cost of expenses such as gas, vehicles, bacon, eggs, beef, milk, and home care have been some of the fastest-growing expenses for older Americans. According to AAA, the national average price for gas rose to $3.27 this week, making it the highest in seven years. Housing and health care costs also increased 118% and 145%, respectively.
As the Social Security Administration looks to increase the number of payouts, their funding is starting to dry up. The fund it pays out of is set to dry up by 2033 unless Congress finds a way to fix the long-term funding shortfall. Part of the reason for the shortfall is the pandemic, which reduced the number of those paying Social Security tax.