ECON Social Security COLA largest in decades as inflation jumps

jward

passin' thru
Social Security COLA largest in decades as inflation jumps
By RICARDO ALONSO-ZALDIVAR and CHRISTOPHER RUGABER18 minutes ago


This Tuesday, Oct. 12, 2021, photo shows a Social Security card in Tigard, Ore.  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.  (AP Photo/Jenny Kane)

This Tuesday, Oct. 12, 2021, photo shows a Social Security card in Tigard, Ore. 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. (AP Photo/Jenny Kane)

WASHINGTON (AP) — 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.

Posted for fair use
 

amazon

Veteran Member
How can US afford this? I'm not getting a 5% raise. SS is not meant to be retirement.

Edited to add: I'm sure that will make some mad. If we want to increase SS benefits we need to pull back on all our wasted $$ to other countries and non essentials.
 
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hiwall

Veteran Member
How can US afford this? I'm not getting a 5% raise. SS is not meant to be retirement.
Of course our government can afford this. The government collected this money for 40 years from each recipient and invested that money wisely so after the 40 years each recipient would have a huge amount saved for just them in a special personal retirement account. This was a wise move by our government in the past to provide a steady income for all retirees.
 

Sammy55

Veteran Member
Of course our government can afford this. The government took this money without permission for 40 years from each recipient and invested that money wisely (yeah right!) so after the 40 years each recipient would have a huge amount saved (yeah right #2) for just them in a special personal retirement account(yeah right #3). This was a wise move(yeah right #4) by our government in the past to provide a steady income (yeah right #5)for all retirees.
There...I fixed it for you.
 

Faroe

Un-spun
If you worked all your life, and they stole it from you, I am more than happy to see the increase paid out. My issue is with all expanded entitlements that suck off it. People who never worked are getting "crazy money."

That infuriates me. I would rather not have the program at all, but it was never meant to be another welfare handout to young people. You get more of what you subsidize.
 

nomifyle

Has No Life - Lives on TB
How can US afford this? I'm not getting a 5% raise. SS is not meant to be retirement.

Edited to add: I'm sure that will make some mad. If we want to increase SS benefits we need to pull back on all our wasted $$ to other countries and non essentials.
There are a lot of clueless people that SS is their retirement, I'm one of them. When I retired 12 years ago my ss was $887 a month and I managed to live on it. I was debt and mortgage free and lived in a FEMA camper in the woods on my own land that I inherited.

And its not a f...ing entitlement.

God is good all the time

Judy
 

Bubble Head

Has No Life - Lives on TB
I had to pay into SS under threat of IRS agents enforcement. Not my idea. This raise is nothing more than cutting a dogs tail off and feeding it to him expecting to be liked by the dog. The train of inflation rolling down the line is far higher than 5.9%.
 

Kathy in FL

TB Fanatic
Of course our government can afford this. The government collected this money for 40 years from each recipient and invested that money wisely so after the 40 years each recipient would have a huge amount saved for just them in a special personal retirement account. This was a wise move by our government in the past to provide a steady income for all retirees.
It is a ponzi scheme. What was collected has already been used to pay out to others. Your “pay in” that was collected was spent a long time ago.
 

Just Plain Mom

Veteran Member
There are a lot of clueless people that SS is their retirement, I'm one of them. When I retired 12 years ago my ss was $887 a month and I managed to live on it. I was debt and mortgage free and lived in a FEMA camper in the woods on my own land that I inherited.

And its not a f...ing entitlement.

God is good all the time

Judy
We are them, too. We live on our $25,000 per year and although we have to be frugal (which is my nature), we are just fine., debt and mortgage free. A LOT of it goes to property and school taxes! We have a small savings account (in an IRA) and had intended to work a couple more years but health and covid have prevented that, so we will do what we do.

We worked hard (and raised three productive kids who also work hard) and did our best to save, but a lot of our money goes to medical bills and it'd be foolish not to take the best care of ourselves that we can. I'm not going to say we trusted the government, but they force-took it and squandered it. I do agree, we should stop wasting money on giving to other countries (who line their leaders'--and ours--pockets a lot of the time).

But it's CERTAINLY not an entitlement!!
 

Kathy in FL

TB Fanatic
Supreme Court says that SS is an entitlement from a tax imposed by Congress that they can turn on and off at will.

I’m sorry folks, but they have stolen from us, used it to pay other people, and now they will steal from our kids to pay us. Well, not me as I’m not retirement age. I have at least 10 years to go. And that is presupposing that SS will even be there in its current form which I doubt.

When you count on being fed by the Beast, sooner or later you are actually the Beast’s dinner.
 
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anna43

Veteran Member
I would be thrilled with that raise except that I know the Medicare premium increase will take most of it. Also supplemental policy premiums increase annually as do the RX premiums. My light/gas bill recently increased $20 with news reports indicating that will be going much higher. My food expense has increased over budgeted amount etc. My cost for gas has increased but since I mostly stay home I only use half a tank in two months but still paying way more than 2020.

For people over 70 we were sold that the money taken out of EVERY PAYCHECK for SS would provide for us in retirement. The "lucky" people back then worked for companies that provided pensions to "supplement" SS. Having always lived just above or way below the poverty line savings was difficult so we were happy to buy into that story. I started working at age 17 and my dh at age 15 (actually younger but that was cash and unreported) so a lot of years paying in at lower wages doesn't translate into big monthly payments, but still every single check had SS taken out. I never had a job that provided retirement benefits.

When it became obvious that SS wasn't going to be enough I decided I had to work beyond 66. I started drawing SS at age 66 and put every dollar I earned until I retired at 70 into a savings account -- that's my retirement fund. My dh passed at age 72 so my SS went away and I started drawing his larger amount. So in the last 6 years I've managed on that, but it is no longer possible so next year will find me nibbling away at my savings. What's scary (other then this country going the hell in a handbasket) is my mother just turned 100 and her mother lived to 92 so nibbling away is going to exhaust those funds sooner rather than later.
 
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Chicken Mama

Veteran Member
SS is to supplement retirement; never intended to be your entire retirement fund. My MIL never saved a penny and received a huge dose of reality when I told her that WE are not her retirement fund.

Taxpayers are not responsible for you. YOU are responsible for yourselves, and if you didn't save then that's no one's fault but your own.
 

Melodi

Disaster Cat
On the other hand, there is a much larger contingent of people aged 80 to as much as 110 who are pretty much totally dependent on Social Security for various reasons.

While some are in nursing homes, many are still able to live independently or semi-independently. These people are not likely to be going out and getting jobs, and telling them it is their own "fault" (even when true) does not solve the problem.

Unless things get so bad that people are willing to ignore fragile elderly and disabled people sitting on blankets with a tin cup the way they often do in the front of third world hospitals or dying in ditches; it really is cheaper, in the long run, to support these people in a minimally dignified fashion than putting them all in uber-expensive nursing homes.

I'm not against personal responsibility that is important too, but I think sometimes we have to face the fact the reality on the ground may be a bit more complicated than "let them fix themselves," especially when it comes to the oldest old or truly totally disabled.
 

Bps1691

Veteran Member
I have paid FICA since I was 16 years old. I owned a business for 7 years and paid both sides of it for myself and the employees (all out of the profits that would have gone into my pocket). I still work full time in IT and still paying.

I took social security the day that I reached full retirement age as did my wife. We continued working full time for the years since. We also have our own savings and retirement that we built up throughout our lives. We have been frugal all our lives and done without motor homes, fancy boats and our vacations were at most one week camping out when the kids were young. Since they've gown and moved on to their own lives, a trip once a year for a few days to see wife's sisters in Arkansas. Other wise it's a one or three day trip here and yon by car.

The SS checks go straight into one account that has been used to do the big things prep wise we could never afford before and as added savings.

Guess what, I don't feel a bit guilty about it.

To those who think I'm taking advantage- I'm playing the government's game to my advantage.

By the grace of God we've been able to work in something we like and that paid well.

We've worked hard since we started before going to colleg in learning skills that were in demand. We've upgraded them every step of the way out of our own pockets.

Someday SS will go broke because someday the world will recognize what trusting in the full faith and credit of the U.S. Government is really worth.

Same as we did almost 50 years ago.
 

WalknTrot

Veteran Member
How can US afford this? I'm not getting a 5% raise. SS is not meant to be retirement.

Edited to add: I'm sure that will make some mad. If we want to increase SS benefits we need to pull back on all our wasted $$ to other countries and non essentials.
Yeah...I always laugh when retired people whine and say they lived on a "fixed" income. Hell...I've gotten raises waaaay more often in retirement than I ever got working.

5.9%? Thanks for the info. Guess I can go buy that 40 foot yacht now and winter in the Bahamas!
 

Dozdoats

On TB every waking moment
Almost no one ever says a mumblin' word about the elephant in the living room - INFLATION. Which is GOVERNMENT POLICY.

I may have gotten this all completely backwards my whole adult life. But if I did it was MY DECISIONS that are responsible - gee, kinda like EVERYONE ELSE is responsible for THEIR decisions, huh???
 

Bps1691

Veteran Member
On the other hand, there is a much larger contingent of people aged 80 to as much as 110 who are pretty much totally dependent on Social Security for various reasons.

While some are in nursing homes, many are still able to live independently or semi-independently. These people are not likely to be going out and getting jobs, and telling them it is their own "fault" (even when true) does not solve the problem.

Unless things get so bad that people are willing to ignore fragile elderly and disabled people sitting on blankets with a tin cup the way they often do in the front of third world hospitals or dying in ditches; it really is cheaper, in the long run, to support these people in a minimally dignified fashion than putting them all in uber-expensive nursing homes.

I'm not against personal responsibility that is important too, but I think sometimes we have to face the fact the reality on the ground may be a bit more complicated than "let them fix themselves," especially when it comes to the oldest old or truly totally disabled.

"Unless things get so bad that people are willing to ignore fragile elderly and disabled people sitting on blankets with a tin cup"

Wasn't that long ago that families took in their elderly and disabled to care and provide for.

The Churches had extensive programs to help the borderline cases even if they weren't members. It went far beyond the "meals on wheels".

Once upon a time neighbors, friends and other good hearted people cared for and worked with those in their areas that needed the help.

Somewhere along the line we went from caring about people to them being a "burden" to be shoved off and ignored.

A good number of the homeless have major mental or drug use issues. Once upon a time the government had institutions and programs to help these folks, but at a point in time closed them down and ended the programs. Transferring the problems to the street where they don't even enforce the laws for violence, hygiene or property rights.

Like all government programs, Social Security was full of good intentions, but when enacted was shortsighted and poorly executed. It sure didn't help that during Johnson the "trust fund" (lol) became a pool of free money for the politicos. There is trillions in IOU's that the government OWES social security.

Also didn't help when Congress raised the taxes on those earning Social Security (Biden voted for the increases twice!).

Sad thing is that the gooberment will soon get so desperate for mo money, they'll make a way to rob the 401K's, IRA's, Roths and pensions from those who earned them through working to give to those they deem "need it more". After all they believe in equal outcomes, not equal opportunities - the old "it isn't fair" mantra they use all the time.
 
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justme

Contributing Member
"Unless things get so bad that people are willing to ignore fragile elderly and disabled people sitting on blankets with a tin cup"

Wasn't that long ago that families took in their elderly and disabled to care and provide for.

The Churches had extensive programs to help the borderline cases even if they weren't members. It went far beyond the "meals on wheels".

Once upon a time neighbors, friends and other good hearted people cared for and worked with those in their areas that needed the help.

Somewhere along the line we went from caring about people to them being a "burden" to be shoved off and ignored.

A good number of the homeless have major mental or drug use issues. Once upon a time the government had institutions and programs to help these folks, but at a point in time closed them down and ended the programs. Transferring the problems to the street where they don't even enforce the laws for violence, hygiene or property rights.

Like all government programs, Social Security was full of good intentions, but when enacted was shortsighted and poorly executed. It sure didn't help that during Johnson the "trust fund" (lol) became a pool of free money for the politicos. There is trillions in IOU's that the government OWES social security.

Also didn't help when Congress raised the taxes on those earning Social Security (Biden voted for the increases twice!).

Sad thing is that the gooberment will soon get so desperate for mo money, they'll make a way to rob the 401K's, IRA's, Roths and pensions from those who earned them through working to give to those they deem "need it more". After all they believe in equal outcomes, not equal opportunities - the old "it isn't fair" mantra they use all the time.

:applaud::applaud::applaud:
 

amazon

Veteran Member
At some point it's just socialism. Seems like we're toeing the line pretty close already. Everyone looks to govt for everything. We can see the results of that. Why work? Well the majority of people aren't.
Socialists eventually run out of other people's money. I think many with means are already *going Galt*.
 
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