Social Security COLA largest in decades as inflation jumps

cigaretteman

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Millions of retirees on Social Security will get a 5.9% boost in benefits for 2022. The biggest cost-of-living adjustment in 39 years follows a burst in inflation as the economy struggles to shake off the drag of the coronavirus pandemic.


The COLA, as it's commonly called, amounts to $92 a month for the average retired worker, according to estimates released Wednesday by the Social Security Administration. That marks an abrupt break from a long lull in inflation that saw cost-of-living adjustments averaging just 1.65% a year over the last 10 years.


With the increase the estimated average Social Security payment for a retired worker will be $1,657 a month next year. A typical couple’s benefits would rise by $154 to $2,753 per month.


“It goes pretty quickly,” retiree Cliff Rumsey said of the cost-of-living increases he's seen. After a career in sales for a leading steel manufacturer, Rumsey lives near Hilton Head Island, South Carolina. He cares at home for his wife of nearly 60 years, Judy, who has advanced Alzheimer's disease. Since the coronavirus pandemic, Rumsey said he has noted price increases for food, wages paid to caregivers who occasionally spell him and personal care products for Judy, not to mention energy costs.


The COLA affects household budgets for about 1 in 5 Americans. That includes Social Security recipients, disabled veterans and federal retirees, nearly 70 million people in all. For baby boomers who embarked on retirement within the last 15 years, it will be the biggest increase they've seen.


"It's going to be welcome," said analyst Mary Johnson of the nonpartisan Senior Citizens League advocacy group. “But what we are hearing is that even with the COLA, buying power will still be eroded because price increases are still going up.”


Policymakers say the COLA was designed as a safeguard to protect Social Security benefits against the loss of purchasing power in an ever-changing economy, and not a pay bump for retirees. About half of seniors live in households where Social Security benefits provide at least 50% of their income, and one-quarter rely on their monthly payment for all or nearly all their earnings.


“Regardless of the size of the COLA, you never want to minimize the importance of the COLA,” said retirement policy expert Charles Blahous, a former public trustee helping to oversee Social Security and Medicare finances. “What people are able to purchase is very profoundly affected by the number that comes out. We are talking the necessities of living in many cases.”


This year’s Social Security trustees report amplified warnings about the long-range financial stability of the program, but there’s little talk about fixes in Congress with lawmakers’ attention consumed by President Joe Biden’s massive domestic agenda legislation and partisan machinations over the national debt. Social Security cannot be addressed through the budget reconciliation process Democrats are attempting to use to deliver Biden’s promises.


But Social Security’s turn will come, said Rep. John Larson, D-Conn., chairman of the House Social Security subcommittee and author of legislation to tackle looming shortfalls that would leave the program unable to pay full benefits in less than 15 years. His bill would raise payroll taxes while also changing the COLA formula to give more weight to health care expenses and other costs that weigh more heavily on the elderly. Larson said he intends to press ahead next year.


“This one-time shot of COLA is not the antidote,” he said.


Although Biden’s domestic package includes a major expansion of Medicare to cover dental, hearing and vision care, Larson said he hears from constituents that seniors are feeling neglected by the Democrats.


“In town halls and tele-town halls they’re saying, ‘We are really happy with what you did on the child tax credit, but what about us?’” Larson added. “In a midterm election, this is a very important constituency.”


The COLA is only one part of the annual financial equation for seniors. An announcement about Medicare’s Part B premium for outpatient care is expected soon. It’s usually an increase, so at least some of any Social Security raise goes for health care. The Part B premium is now $148.50 a month, and the Medicare trustees report estimated a $10 increase for 2022.


Economist Marilyn Moon, who also served as public trustee for Social Security and Medicare, said she believes the current spurt of inflation is an adjustment to highly unusual economic circumstances and the pattern of restraint on prices will reassert itself with time.


“I would think is going to be an increase this year that you won’t see reproduced in the future,” Moon said.


Policymakers should not delay getting to work on retirement programs.


“We’re at a point in time where people don’t react to policy needs until there is a sense of desperation, and both Social Security and Medicare are programs that benefit from long-range planning rather short-range machinations,” she said.

 
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Hoosierhawkeye

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On the inflation front can anyone tell me why the fed hasn't increased interest rates?

We had these rock bottom interest rates for a very long time, so it may be a weird thing to increase them but the fed has previously kept those interest rates higher to control inflation.

Quite frankly I think they deserve a big part of the blame for not acting.
 

Rifler

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On the inflation front can anyone tell me why the fed hasn't increased interest rates?

We had these rock bottom interest rates for a very long time, so it may be a weird thing to increase them but the fed has previously kept those interest rates higher to control inflation.

Quite frankly I think they deserve a big part of the blame for not acting.

The Fed's position is that this is a short term condition and I suspect they don't want to put the brakes on this recovery...
 

Hoosierhawkeye

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The Fed's position is that this is a short term condition and I suspect they don't want to put the brakes on this recovery...

Well you can't blame this one on Biden than. Trump appointed 4 out of 6 of them as governors and one of the ones he didn't appoint as governor he promoted and made him chair.

So Trump has his hands on 5 of the 6 members of the Fed.

Biden hasn't appointed a member of the Fed yet.
 

MitchLL

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Well you can't blame this one on Biden than. Trump appointed 4 out of 6 of them as governors and one of the ones he didn't appoint as governor he promoted and made him chair.

So Trump has his hands on 5 of the 6 members of the Fed.

Biden hasn't appointed a member of the Fed yet.
Not likely you'll hear that info on conservative media.
 

Rifler

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Well you can't blame this one on Biden than. Trump appointed 4 out of 6 of them as governors and one of the ones he didn't appoint as governor he promoted and made him chair. So Trump has his hands on 5 of the 6 members of the Fed. Biden hasn't appointed a member of the Fed yet.

Funny,.. you sound guilty.
 
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Fijimn

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The cap in 2021 is $140,000. I get the notion of fairness because those that pay the full tax will not recover that much at retirement. And i guess I enjoy seeing the small bump in pay come May, but removing the cap or at least increasing to $250,000 would go a long way to fixing social security.
 
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soybean

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On the inflation front can anyone tell me why the fed hasn't increased interest rates?

We had these rock bottom interest rates for a very long time, so it may be a weird thing to increase them but the fed has previously kept those interest rates higher to control inflation.

Quite frankly I think they deserve a big part of the blame for not acting.
I'm stunned that they have delayed this move in rates.
 

Hoosierhawkeye

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And there you go. By the way, is anyone blaming anyone in this thread? Oh wait. You just did. What a shock.

Actually I didn't. . . Because I can acknowledge that a lot of this might have been beyond anyone's control.

But I am saying that if you are looking for someone to blame, Biden doesn't seem to be the guy. The agency who's #1 job is to control inflation has just sat and done nothing. And that agency is being run by a board and 4 out of 6 of the members of that board are Trump appointees and one of the ones that he didn't even appoint to the board he promoted to chair.
 
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Nov 28, 2010
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The COLA, as it's commonly called, amounts to $92 a month for the average retired worker, according to estimates released Wednesday by the Social Security Administration.
.059x = $92

So they're saying the average retired SS beneficiary gets $1559 a month. That's $360 a week. Or $327, after they take out for Medicare Part B.

Barely half what many unemployed folks were getting during the pandemic, between federal and state supports.

How well could you live on that?
 

The Tradition

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.059x = $92

So they're saying the average retired SS beneficiary gets $1559 a month. That's $360 a week. Or $327, after they take out for Medicare Part B.

Barely half what many unemployed folks were getting during the pandemic, between federal and state supports.

How well could you live on that?

It would take two weeks of benefits just to pay the summertime electric bill here at Tradition Manor.
 

Rifler

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.059x = $92

So they're saying the average retired SS beneficiary gets $1559 a month. That's $360 a week. Or $327, after they take out for Medicare Part B.

Barely half what many unemployed folks were getting during the pandemic, between federal and state supports.

How well could you live on that?

News Flash,.. people who retire on nothing but Social Security are referred to as "poor".
 

BrunoMars420

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Actually I didn't. . . Because I can acknowledge that a lot of this might have been beyond anyone's control.

But I am saying that if you are looking for someone to blame, Biden doesn't seem to be the guy. The agency who's #1 job is to control inflation has just sat and done nothing. And that agency is being run by a board and 4 out of 6 of the members of that board are Trump appointees and one of the ones that he didn't even appoint to the board he promoted to chair.
The rate change has nothing to do with trump no matter how much you try to say it is. The Fed is separate from the government and Trump actually disagreeed with the current fed chairman numerous times.

In terms of the rate hike, someone already mention it but they are seeing this as a short term deal and are not panicking yet.
 

Hoosierhawkeye

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The rate change has nothing to do with trump no matter how much you try to say it is. The Fed is separate from the government and Trump actually disagreeed with the current fed chairman numerous times.

In terms of the rate hike, someone already mention it but they are seeing this as a short term deal and are not panicking yet.

K what I'm saying is that the Fed is appointed by the president and the president that appointed 4 out of 6 of them is Donald Trump. All I'm saying.
 

Rifler

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My main point was I keep hearing Biden being blamed for this inflation but I pointed out very clearly how it makes no sense to blame him because of his lack of appointments to the Fed.

Don't understand your reasoning,... Biden can still be responsible for this inflation even though he hasn't appointed anyone at the Fed to address it.
 

Hoosierhawkeye

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Don't understand your reasoning,... Biden can still be responsible for this inflation even though he hasn't appointed anyone at the Fed to address it.

Seems like the agency (and the person that appointed the people to run that agency) who's #1 job is to control inflation and who's kept our interest rates at zero for almost 2 decades should be more responsible.
 

BrunoMars420

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Don't understand your reasoning,... Biden can still be responsible for this inflation even though he hasn't appointed anyone at the Fed to address it.
I think Covid is responsible for most everything that is happening in terms of the economy and short term (hopefully) inflation
 

Rifler

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Seems like the agency (and the person that appointed the people to run that agency) who's #1 job is to control inflation and who's kept our interest rates at zero for almost 2 decades should be more responsible.

I see,.. so you would blame the fire department and not the arsonist.
 

Hoosierhawkeye

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I see,.. so you would blame the fire department and not the arsonist.

The fed has far more control on inflation than the president or congress.

The spending bills don't cause inflation because they don't create new money they just borrow that money from other sources.
 

Hoosierhawkeye

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It has completely changed and screwed up the global economy. How can you disregard that?

Because Trumpy bear isn't in charge.

When he was in charge COVID was the thing causing all the unemployment.

Suddenly he's out and we don't have enough workers and it's all Joe Biden's fault that our population was so skewed and our working age population is declining.

Too bad the boomers and Gen X were so selfish that they didn't have enough kids. Honestly I blame them and all you people who were not too long ago going nuts about how we have too many people.
 

Rifler

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The fed has far more control on inflation than the president or congress. The spending bills don't cause inflation because they don't create new money they just borrow that money from other sources.
Everything that drives up the cost of goods and labor creates inflation,.. The recent and yet to come spending bills do both of these things.
 

Rifler

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It has completely changed and screwed up the global economy. How can you disregard that?
I don't disregard it,.. I just see some of our moves towards getting out of the pandemic as worsening the current condition.
 

Hoosierhawkeye

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Here is the thing. . .

If you look at the charts the US dollar has been increasing in value relative to the Euro.

So if we're experiencing inflation than Europe is also experiencing inflation except worse.

 

Hoosierhawkeye

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The recent and significant increases in the cost of labor for one,... This cost will be ultimately have to be paid for with across the board cost increases throughout the economy,... This is called inflation.

How does the spending bill increase the cost of labor and why has the value of the US dollar been trending up against other major currencies since around May of 2021.

Trending up against the Pound


Trending up against the Euro


The Indian Rupee


The Yen


The US dollar now buys more Gold


And silver

 

Rifler

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How does the spending bill increase the cost of labor
Anything that hampers people from returning to the work forces drives up the cost of labor,.. The recent spending bills have done nothing to promote a return to work, they have in fact restricted and delayed a return to normalcy.
 

Hoosierhawkeye

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Anything that hampers people from returning to the work forces drives up the cost of labor,.. The recent spending bills have done nothing to promote a return to work, they have in fact restricted and delayed a return to normalcy.

Yeah well the unemployment bonus is over and I'm pretty sure people are not still living off their stimulus money.

And we still don't have enough workers.

Population dynamics suck. Too many boomers, not enough younger workers. Bunch of boomers retired.