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Yahoo Finance’s Stephanie Asymkos on the potential for the biggest increase in Social Security benefits since 1983.
Video transcript
KRISTIN MYERS: Happy to see you again. Our personal financial reporter, Stephanie Asymkos, is here to explain why seniors receive some of the biggest Social Security payments in decades. Hi, Stéphanie. What’s going on here?
STEPHANIE ASYKOS: So that’s a big deal, Kristin. And beneficiaries could see their monthly benefits increase up to $ 80 per month, starting next January. And that’s according to a Bank of America memo that was released this week. So this is in fact the biggest boost since about 1983 that beneficiaries will see.
And at the start of this year, there was only about a 1.3% increase in the cost of living adjustment. And that translates to about $ 20 more per month. And that wasn’t enough to get people to somehow keep up with this year’s 5% spike in inflation.
And we’ve all noticed it. Things like cars, travel, washing machines, certain groceries like fruit and milk – all of these things are more expensive now. And Social Security was designed to guard against this inflation.
So the beneficiaries, who usually have fixed incomes, always have – their benefits always provide them with purchasing power to buy things. This adjustment cost is therefore truly enormous and is a way of ensuring that the elderly and Americans with disabilities have a meaningful income.
KRISTIN MYERS: So with all this extra money in the pockets of the elderly and the disabled, what does this mean for the economy right now?
STEPHANIE ASYKOS: Okay, so analysts are really looking at this further boost to really stimulate the economy for next year. Inflation should therefore fall next year. But with COLA, this rising cost-of-living adjustment adds up to around $ 80 billion in net tax benefits.
So that’s a good thing for people on tight budgets right now. Because financial relief is on its way, and a good thing for the beneficiaries, who will just have more to spend, will feel a little more financially comfortable, and then stimulate this economy.
KRISTIN MYERS: I also want to ask, when can some of these recipients really start to expect to see some of this extra money?
STEPHANIE ASYKOS: Great question. So nothing is official yet. These are just analyst estimates. But the Social Security Administration still has about three months to collect data before making its official decision. This will usually come in October. And then once that official determination is made, the updated amount will be rolled out, starting in January.
So maybe a couple – maybe let’s say six more months before more money in those monthly benefit checks.
KRISTIN MYERS: Yes, there’s still a long time to go before we can see people getting some of those bigger, bigger paychecks from their Social Security.
Stephanie Asymkos, thank you very much for giving us all of these details. His article will be on the YahooFinance.com website if you want to read it and take a look at some of the benefits you could receive over the next couple of months.
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