A Substantial COLA Increase is Predicted For Next Year. It Still Won’t Be enough For Seniors and Here’s Why
There is no denying that times have been tough for many Americans. The economy has been a challenge for millions. However, there is talk about a substantial increase in benefits for Social Security recipients. A COLA increase would be welcome for those who have long suffered from low benefits. The only problem is that seniors may still see less in their pockets.
What is COLA?
The annual COLA or “Cost of Living Adjustment,” is intended to help recipients by increasing funds based on inflation. The amount is determined by estimating costs for the next year based on the Consumer Price Index. This seems to be a reasonable way to adjust for inflation, however, the CPI does not paint a full picture of costs for seniors and the COLA increase often fails to keep up with rising prices.
Why Is a Benefits Increase Needed?
Social Security benefits have been far too low for far too long. Additionally, the economic crisis caused by Covid-19 has driven prices for some goods and services higher than they have been in years. To deal with the economic challenges ahead, recipients need a significant increase. The problem is that costs for seniors will likely still outweigh the boost from an increase.
Will Next Year’s COLA be Enough for Seniors?
COLA does not go far enough. Last year’s 1.3 percent increase was an insult. The adjustment for 2022 is expected to be much more. In fact, it may be the biggest increase in decades. It is important to understand that this increase may not go far. For one thing, the increase is just the minimum needed to make up for inflation. Furthermore, it fails to take into account increases to Medicare Part B premiums and taxes on Social Security income. Check out this story on CNBC for more insight into how far 2022 benefits might go.
Clearly, social Security reform needs to happen. We believe that the best option for many seniors is a bill we call “The Greatest Generation Benefits Act. This legislation would provide Americans over age 82 with an annual benefits increase enough to actually cover their cost of living. Learn more about this legislation and sign our petition here.