Seniors, like everyone, are feeling the pinch. Inflation is rampant, with higher prices spurred on by a multitude of factors including Covid, the Ukraine conflict, supply chain bottlenecks, and probably a good amount of profiteering, too. And it’s not just us. The International Monetary Fund says consumer prices in the world’s advanced economies will increase this year more than at any time since 1984.
Here at home, the Labor Department reports that for the 12-month period ending June 2022, inflation was 9.1%. Prices rose 1.3% from May to June. Obviously last year’s Social Security COLA – just 5.9% – has been inadequate. Retirees cannot keep up with skyrocketing prices.
As of now, the Senior Citizens League projects that the 2023 Social Security Cost of Living Adjustment could be as high as 10.5%. That would mean $175.10 added to the average retiree’s monthly check of $1,668.
Not to look a gift horse in the mouth, but here is a reality check: Seniors shoulder other expenses that can dilute the benefit their COLA increase. Those expenses include higher deductibles for Medicare Part A and Medicare Part B; higher Part B premiums (which increased by 14.5% last year, outpacing the Consumer Price Index); and higher taxes for those whose income may be pushed higher by the COLA.
Some speculate that inflation will cool in the coming months as the Fed raises interest rates, but that’s not a certainty. We will get the final word on the 2023 COLA in October. Stay tuned.