There’s been a lot of talk about the economic impact of last year’s rising inflation. And it doesn’t look like it’s going to end anytime soon. While it’s impacting all Americans, The Intercept says retirees are fortunate because one government program was set up to protect them. It explains that “Social Security benefits are adjusted upward in step with inflation at the beginning of each year, so even as prices rise, recipients lose little purchasing power.”

Boon for Older Americans

The author calls Social Security an inflation-adjusted lifetime annuity. That’s because Social Security benefits go up automatically each year by the same rate as inflation. Because inflation was so high in 2021, this year Social Security recipients saw a 5.9 percent cost-of-living adjustment (COLA).

He considers it a lifetime annuity because once you start collecting Social Security retirement benefits, you will continue to receive the same amount (adjusted for inflation) every month until your death. That’s a better deal than any insurance company would ever offer! Annuities are not adjusted annually for inflation. They typically only go up a few percentage points each year. On the flip side, the Social Security COLA is calculated to keep up with inflation no matter how high it gets. COLA was 11.2 percent in 1981.

Bigger COLA

It’s important to point out that the Social Security COLA is currently calculated using the Consumer Price Index (CPI) for Urban Wage Earners (CPI-W). The Seniors Trust believes that’s not good enough. It wants to see Social Security base its COLA on the Consumer Price Index for the Elderly (CPI-E), which takes the unique spending habits of seniors into account — particularly regarding the cost of healthcare — and offers a more realistic COLA for retirees.

This will happen when lawmakers enact the Social Security Expansion Act. In addition to establishing a fairer COLA calculator, this landmark piece of legislation would provide bigger monthly benefits and shore-up the long-term solvency of Social Security. To show your support for this measure, please add  your name to our petition to Congress.