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Thread: Social Security COLA largest in decades as inflation jumps

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    Default Social Security COLA largest in decades as inflation jumps

    Social Security COLA largest in decades as inflation jumps

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    WEDNESDAY, OCTOBER 13, 2021 | RICARDO ALONSO-ZALDIVAR AND CHRISTOPHER RUGABER, ASSOCIATED PRESS


    This Tuesday, Oct. 12, 2021, photo shows a Social Security card in Tigard, Ore. Millions of retirees on Social Security will get a 5.9% boost in benefits for 2022. The biggest cost-of-living adjustment in 39 years follows a burst in inflation as the economy struggles to shake off the drag of the coronavirus pandemic. (AP Photo/Jenny Kane)


    WASHINGTON (AP) — Millions of retirees on Social Security will get a 5.9% boost in benefits for 2022. The biggest cost-of-living adjustment in 39 years follows a burst in inflation as the economy struggles to shake off the drag of the coronavirus pandemic.

    The COLA, as it's commonly called, amounts to $92 a month for the average retired worker, according to estimates released Wednesday by the Social Security Administration. That marks an abrupt break from a long lull in inflation that saw cost-of-living adjustments averaging just 1.65% a year over the past 10 years.

    With the increase, the estimated average Social Security payment for a retired worker will be $1,657 a month next year. A typical couple’s benefits would rise by $154 to $2,753 per month.

    But that's just to help make up for rising costs that recipients are already paying for food, gasoline and other goods and services.

    “It goes pretty quickly,” retiree Cliff Rumsey said of the cost-of-living increases he's seen. After a career in sales for a leading steel manufacturer, Rumsey lives near Hilton Head Island, South Carolina. He cares at home for his wife of nearly 60 years, Judy, who has advanced Alzheimer's disease. Since the coronavirus pandemic, Rumsey said he has also noted price increases for wages paid to caregivers who occasionally spell him and for personal care products for Judy.

    The COLA affects household budgets for about 1 in 5 Americans. That includes Social Security recipients, disabled veterans and federal retirees, nearly 70 million people in all. For baby boomers who embarked on retirement within the past 15 years, it will be the biggest increase they've seen.

    Among them is Kitty Ruderman of Queens in New York City, who retired from a career as an executive assistant and has been collecting Social Security for about 10 years. “We wait to hear every year what the increase is going to be, and every year it's been so insignificant,” she said. “This year, thank goodness, it will make a difference.”

    Ruderman says she times her grocery shopping to take advantage of midweek senior citizen discounts, but even so price hikes have been “extreme.” She says she doesn't think she can afford a medication that her doctor has recommended.

    AARP CEO Jo Ann Jenkins called the government payout increase “crucial for Social Security beneficiaries and their families as they try to keep up with rising costs.”

    Policymakers say the COLA was designed as a safeguard to protect Social Security benefits against the loss of purchasing power, and not a pay bump for retirees. About half of seniors live in households where Social Security benefits provide at least 50% of their income, and one-quarter rely on their monthly payment for all or nearly all their income.

    “Regardless of the size of the COLA, you never want to minimize the importance of the COLA,” said retirement policy expert Charles Blahous, a former public trustee helping to oversee Social Security and Medicare finances. “What people are able to purchase is very profoundly affected by the number that comes out. We are talking the necessities of living in many cases.”

    This year’s Social Security trustees report amplified warnings about the long-range financial stability of the program, but there’s little talk about fixes in Congress with lawmakers’ attention consumed by President Joe Biden’s massive domestic legislation and partisan machinations over the national debt. Social Security cannot be addressed through the budget reconciliation process Democrats are attempting to use to deliver Biden’s promises.

    Social Security’s turn will come, said Rep. John Larson, D-Conn., chairman of the House Social Security subcommittee and author of legislation to tackle shortfalls that would leave the program unable to pay full benefits in less than 15 years. His bill would raise payroll taxes while also changing the COLA formula to give more weight to health care expenses and other costs that weigh more heavily on the elderly. Larson said he intends to press ahead next year.

    “This one-time shot of COLA is not the antidote,” he said.

    Although Biden’s domestic package includes a major expansion of Medicare to cover dental, hearing and vision care, Larson said he hears from constituents that seniors are feeling neglected by the Democrats.

    “In town halls and tele-town halls they’re saying, ‘We are really happy with what you did on the child tax credit, but what about us?’” Larson added. “In a midterm election, this is a very important constituency.”

    The COLA is only one part of the annual financial equation for seniors. An announcement about Medicare’s Part B premium for outpatient care is expected soon. It’s usually an increase, so at least some of any Social Security raise goes for health care. The Part B premium is now $148.50 a month, and the Medicare trustees report estimated a $10 increase for 2022.

    Economist Marilyn Moon, who also served as public trustee for Social Security and Medicare, said she believes the current spurt of inflation is an adjustment to highly unusual economic circumstances and the pattern of restraint on prices will reassert itself with time.

    “I would think there is going to be an increase this year that you won’t see reproduced in the future,” Moon said.

    Policymakers should not delay getting to work on retirement programs, she said.

    “We’re at a point in time where people don’t react to policy needs until there is a sense of desperation, and both Social Security and Medicare are programs that benefit from long-range planning rather short-range machinations,” she said.

    Social Security is financed by payroll taxes collected from workers and their employers. Each pays 6.2% on wages up to a cap, which is adjusted each year for inflation. Next year the maximum amount of earnings subject to Social Security payroll taxes will increase to $147,000.

    The financing scheme dates to the 1930s, the brainchild of President Franklin D. Roosevelt, who believed a payroll tax would foster among average Americans a sense of ownership that would protect the program from political interference.

    That argument still resonates. “Social Security is my lifeline,” said Ruderman, the New York retiree. “It's what we've worked for.”

    https://www.marketbeat.com/articles/...ewsletterclick

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  2. #2
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    It will be needed because inflation is causing the price of everything to go up. However, don't spend it yet, because like every year they will take it back by raising your Medicare payment. They need it because of inflation causing the cost of healthcare to go up.
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    Quote Originally Posted by Pastor Guest View Post
    It will be needed because inflation is causing the price of everything to go up. However, don't spend it yet, because like every year they will take it back by raising your Medicare payment. They need it because of inflation causing the cost of healthcare to go up.
    Medicare Part B premiums are also on the rise in 2022. The 2022 Medicare Part B premium is expected to be $158.50 per month, which is up from $148.50 in 2021.

    So a 10 dollar raise is not bad at all still will be a nice COLA
    raise for us on SS like me

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    just like the last several cola the amount given is the exact amount medicare increases its premium so not a real big deal at all same crap different day SSDD
    *** Light travels faster than sound...............That's why some people appear bright until you hear them speak.***

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    Quote Originally Posted by always learning View Post
    just like the last several cola the amount given is the exact amount medicare increases its premium so not a real big deal at all same crap different day SSDD

    At least this time people WILL get a substantial raise. the average is over 126.00. Not bad when they will only raise Medicare premium by 10 bucks. And some don't even get that cut as that side of Medicare is paid by their states. Just like that ads on TV say. They never take it out directly so your SS Check is upped by that 148.00 amount..... lol as they never take it out in the first place. COOL. And also the Food Stamp allotment goes up by 20& in Oct. That ain't bad either. Nice raises for us poor people lol

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    The Cola stuff is probably depleting the SS reserves, so tis possible there will be cuts in the future.
    On the other hand, they may be betting on lots of older folks dying from the VAX craze.

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    Quote Originally Posted by Ivan88 View Post
    The Cola stuff is probably depleting the SS reserves, so tis possible there will be cuts in the future.
    On the other hand, they may be betting on lots of older folks dying from the VAX craze.
    Oh you are a laugh riot. Wow passing on bs again how nice of you. NOT

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    Quote Originally Posted by Ivan88 View Post
    The Cola stuff is probably depleting the SS reserves, so tis possible there will be cuts in the future.
    On the other hand, they may be betting on lots of older folks dying from the VAX craze.
    I was thinking the same thing, Ivan. Part of the plandemic seems to be kill off the useless eaters. Although I personally don't fit the statistical model. 74 and work 5 1/2 days a week, while the 20 & 30 somethings sit home and refuse to work. So many working age losers scamming the system and those that do work are either killing themselves or not giving a shit. Never thought it would get this bad. Every other small business owner I talk nto says the same thing..... can't get or keep staff. Somehow the lockdowns that keep millions from working, formed new behaviors. Those in the lower half of wage earners won't work.

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    Quote Originally Posted by Ivan88 View Post
    The Cola stuff is probably depleting the SS reserves, so tis possible there will be cuts in the future.
    On the other hand, they may be betting on lots of older folks dying from the VAX craze.
    There haven't been any Social Security reserves for years, just IOU's. The reserves were spent long ago.
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    My brother pointed out an interesting thought, this takes place in 2022, so they expect inflation to be at 5.9% in 2022.

    SS is put in the Gov't general funds. Meaning it can be spent whatever the Gov't wants

    There is no separate account.

    IF the FEDS and State Gov't actually put the taxes in separate accounts for what the taxes are supposed to be for, we would be in better shape nation wide.

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