Why the Social Security COLA Can’t Keep Up With Seniors’ Spending
Each year, the Social Security Administration (SSA) evaluates economic data and issues a cost-of-living adjustment (COLA) intended to offset inflation. This year’s COLA was 2.8 percent, which gave recipients an extra $56 per month on average.
The problem is, according to The Motley Fool, expenses are increasing at a faster rate. The article notes, “That eats up a chunk of a typical retiree’s COLA before it even hits their bank account.”
As of this past spring, the price of gas is up 28.4 percent, electricity is up 6.1 percent, housing is up 3.3 percent, and food is up 3.2 percent. These numbers clearly show that living expenses outpace retiree income.
Calls for a New COLA Calculator
The problem is that the COLA calculator doesn’t adequately account for the biggest expenses seniors face. This is why senior advocates, including The Seniors Trust, believe the Consumer Price Index for the Elderly (CPI-E) should be used to calculate the COLA instead of the Consumer Price Index for Wage Earners (CPI-W). This index shows how inflation actually impacts the typical retiree based on seniors’ spending habits.
We are calling on Congress to enact the Social Security Expansion Act. It calls for adopting the CPI-E as the COLA calculator, better ensuring that Social Security benefits keep pace with inflation.
Additionally, this landmark piece of legislation would also extend the solvency of the Social Security trust fund through 2096, expand Social Security benefits by about $200 a month for current and new beneficiaries, require millionaires and billionaires to pay their fair share into Social Security by lifting the wage cap, and improve the Special Minimum Benefit for Social Security recipients which would help low-income workers stay out of poverty.
Is this something you can get on board with? Join us in urging lawmakers to enact the Social Security Expansion Act. You can show your support by signing our petition.
