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As businesses grapple with COVID-related supply and worker shortages, inflation is skyrocketing to rates not seen in years. Higher prices for gasoline, food, cars and more are suffocating Americans, especially older people living on fixed and often modest incomes.
But the spike in inflation is likely to provide seniors with their biggest social security increase in nearly four decades. The government is expected to announce this week the 2022 Social Security cost of living adjustment, or COLA, which will affect 55 million retirees, their dependents and survivors.
Seniors are now scrambling to find ways to save money as inflation takes its toll. Will supporters of the oversized Social Security hike even predict enough?
2022 COLA could be the biggest since 1983
Based on the evolution of inflation in 2020, the Social Security cost of living adjustment for that year, which started to affect payments in January, was 1.3%. He increased benefit checks by an average of $ 20, according to non-partisan advocacy group The Senior Citizens League.
This increase was swallowed up by price increases in 2021.
The COLA for 2022 could be much higher – up to 6.1%, depending on the league. The size is determined by the government inflation figures for the third quarter i.e. July, August and September. Data for September is due on Wednesday, which will allow Social Security to make its big announcement.
If advocates are right, Social Security checks will see their biggest increase next year since 1983, when the COLA was 7.4%.
But the news could be bittersweet. Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League, said some Social Security recipients may see cuts in other benefits because of their larger checks.
“Higher income could mean reduced food stamps, rental assistance, or additional Medicare assistance, which covers most prescription drug costs,” Johnson told MoneyWise.
Group says older people need stimulus control too
The Senior Citizens League says older Americans may not want Social Security’s biggest COLA to go into effect in January. The group is calling on Congress to provide seniors with an immediate increase in income – in the form of emergency stimulus checks of $ 1,400 for people on Social Security.
A petition campaign launched in early September has already gathered more than 38,000 signatures in favor of direct payment to help the elderly cope with the painful increase in prices.
These include a 48% increase in gasoline costs over the past year and a 39% increase in heating oil, according to research from the Seniors Group.
“We have heard from thousands of [seniors] who have used up their retirement savings, who have started eating only one meal a day, have started cutting their pills in half because they cannot afford their prescription drugs, ”writes the Senior Citizens League president Rick Delaney in a letter sent to every member of Congress.
Although the Senior Citizens League has over a million supporters, there is a good chance its petition will be ignored by lawmakers, who are focusing on other issues, including infrastructure spending and paying bills. of the government.
Another petition calling for regular checks for $ 2,000 for all Americans has attracted more than 2.9 million signatures – but little to no attention from Congress.
How Americans Can Fight Inflation
A new stimulus check for the elderly may very well never happen, and Social Security’s new COLA won’t arrive for months – and may not go far enough. So, as prices skyrocket, there are several things all Americans, including seniors, can do to lessen some of the effects of inflation on the budget.
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If you’re still making payments on your mortgage, now is a good time to refinance and lower your monthly payment. 30-year mortgage rates have fallen below 3% again, and a new loan could easily save you hundreds of dollars a month. Nearly half of homeowners who refinanced in the year that ended in April are now saving at least $ 300 each month, according to a Zillow survey.
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When shopping online, take advantage of all the great deals and don’t overpay. You can download a handy browser extension that searches for lower prices and instantly provides the promo codes that websites request during checkout.
A few wise investments can also help stave off the effects of rising costs.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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