Social Security recipients will get the biggest benefits boost in years next year thanks to an annual cost-of-living adjustment (COLA) at almost 6%. According to a Syracuse.com report, this will be the biggest jump in almost 40 years. However, any extra cash seniors will receive is likely to be stripped away by pandemic-related inflation.

Yahoo! Finance found consumer prices were up 5.4% in July over the previous year. And The Motley Fool reported that the cost of food was up 3.7%, electricity was up 5.2%, and housing was up 2.8% in August. These figures show why many Social Security beneficiaries will simply see their cost-of-living hikes disappear due to the higher prices for everyday expenses. Couple that with rising Medicare costs and it spells bad news for seniors.

This issue is nothing new, but it’s definitely getting worse. The Motley Fool found that Social Security’s purchasing power declined 30% in the past 20 years. This is spurring calls to change how the Social Security COLA is calculated.

Elderly Expenses

The Social Security Expansion Act calls for using a different measure of inflation to determine COLA – one that more accurately reflects recipients’ real expenses. According to the Syracuse.com article, “That index, known as the Consumer Price Index for the Elderly, rose at an average annual rate of 3.1% from 1982 to 2011, compared with 2.9% for the inflation measure that’s used to calculate the increases now.”

The Seniors Trust supports the passage of the Social Security Expansion Act. We want to see the Consumer Price Index for the Elderly (CPI-E) used to calculate Social Security cost-of-living adjustments (COLAs) instead of the Consumer Price Index for Urban Wage Earners (CPI-W) used currently. The CPI-E takes the unique spending habits of seniors into account — particularly regarding the cost of healthcare — and offers a more realistic COLA for retirees.

Bigger Benefits

While a fairer COLA would certainly help, the Social Security Expansion Act also calls for bigger benefits – about $65 a month on average. This is necessary to help further close the financial bind facing seniors on fixed income. That extra $65 could help offest inflation prices.

The Seniors Trust is not alone. A full 100% of people polled say Congress should pass The Social Security Expansion Act which expands benefits and protects the financial security of retired Americans.