Social Security Recipients to Get Tiny Increase in Benefits
WASHINGTON — Millions of Social Security recipients and federal retirees will get a 0.3 percent increase in monthly benefits next year, the fifth year in a row that older Americans will have to settle for historically low raises.
There was no increase this year. Next year’s benefit hike will be small because inflation is low, driven in part by lower fuel prices.
The federal government announced the cost-of-living adjustment, or COLA, Tuesday morning. By law, the COLA is based on a government measure of consumer prices.
The COLA affects more than 70 million people – about 1 in 5 Americans.
The average monthly Social Security payment is $1,238. That translates into a monthly increase of less than $4 a month.
More bad news for seniors: Medicare Part B premiums, which are usually deducted from Social Security payments, are expected to increase next year to the point in which they will probably wipe out the entire COLA.
By law, the dollar increase in Medicare’s Part B premium cannot exceed a beneficiary’s cost-of-living raise. That’s known as the “hold harmless” provision, and it protects the majority of Medicare recipients.
But another federal law says that the Part B premium must raise enough money to cover one-fourth of expected spending on doctors’ services. That means that a minority of beneficiaries, including new enrollees and higher-income people, have to shoulder the full increase. Their premiums would jump.
Millicent Graves, a retired veterinary technician, says Medicare and supplemental insurance premiums eat up nearly a third of her $929 monthly Social Security payment. And don’t tell the 72-year-old from Williamsburg, Virginia, that consumer prices aren’t going up. She says her insurance premiums went up by $46.50 this year, and her cable TV, Internet and phone bill went up, too.
“I just lose and lose and lose and lose,” Graves said.
More than 60 million retirees, disabled workers, spouses and children get Social Security benefits. The COLA also affects benefits for about 4 million disabled veterans, 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor. Many people who get SSI also receive Social Security.
Since 2008, the COLA has been above 2 percent only once, in 2011. It’s been zero three times.
“This loss of anticipated retirement income compounds every year, causing people to spend through retirement savings far more quickly than planned,” said Mary Johnson of the Senior Citizens League. “Over the course of a 25- or 30-year retirement, it reduces anticipated Social Security income by tens of thousands of dollars.”
By law, the cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of consumer prices generated by the Bureau of Labor Statistics. It measures price changes for food, housing, clothing, transportation, energy, medical care, recreation and education.
The COLA is calculated using the average CPI-W for July, August and September. If prices go up, benefits go up. If prices drop or stay flat, benefits stay the same.
The numbers for July and August suggest COLA of just 0.3 percent. The numbers for September are to be released Tuesday.
Some advocates complain that the government’s measure of inflation doesn’t reflect the costs many older Americans face.
For example, gasoline prices have fallen by nearly 18 percent over the past year, according to the August inflation report, while the cost of medical care has gone up by more than 5 percent.
For seniors who don’t drive much, they don’t get the full benefit of low gas prices, said Max Gulker, a senior research fellow at the American Institute for Economic Research. Many seniors, however, spend more of their income on health care.
Graves said she appreciates lower gas prices, but doesn’t drive much.
“I just have to rely more each month on cashing in investments,” Graves said. “I’m lucky I can do that.”
Being Vigilant of the 7 Benchmarks to end 2022
We are just about to end the fourth quarter of...
- Posted November 22, 2022
Inflation Heading Down, What Happens Now?
The Four Benchmarks to review that confirm inflation may be...
- Posted November 14, 2022
The Six Factors to Expect during the end of 4Q22
We are deep within the fourth quarter we thought it...
- Posted November 10, 2022
Puerto Rico Banks Deliver strong earnings, beating most banks
Puerto Rico Banks Transformed their operational model The Puerto Rico...
- Posted November 9, 2022
US Congress Discrimination affecting the Puerto Rico’s Healthcare Ecosystem
The market dynamics that changed the Healthcare Ecosystem as we...
- Posted November 8, 2022
MCS contributes over $5 million to support member healthcare
The insurer distributed the amount among 409 community pharmacies in...
- Posted November 7, 2022
Droguería Betances Launches 60th Anniversary Ad Campaign
Droguería Betances has launched a new advertising campaign, “60 Reasons...
- Posted October 31, 2022
Puerto Rico Food Industry Helps Communities in Aftermath of Hurricane Fiona
Over three-quarters of a million dollars in aid to...
- October 24, 2022
Medplus Solutions celebrates 10 years Saving Lives
Innovation and continuous growth Expansion of specialized and more...
- May 18, 2022
Amazon Web Services Expands Operations in Puerto Rico
Local Office Will Offer Services to other Caribbean Islands...
- April 22, 2022