Due to inflation, Social Security beneficiaries could witness the largest cost-of-living increase in four decades.
Namely, the Senior Citizens League, a non-partisan organization focusing on issues affecting older Americans, anticipated that the benefits might increase by as much as 8.9%.
This estimation was based on March inflation figures, which revealed that consumer prices increased by 8.5% compared to last year. This was the greatest yearly increase since December 1981 (11.2%).
It all boils down to whether or not inflation has peaked yet or if it will continue to rise. Several economists predicted that inflation subsided, with gasoline pricing accounting for most of the increase last month.
Other experts express uncertainty due to unpredictable elements, such as the conflict in Ukraine and COVID-19.
According to the Social Security Administration, the average Social Security benefit in 2022 increased by 5.9%, for a monthly boost of $92, resulting in a total value of $1,657 for the typical retired American.
According to the Senior Citizens League figures, inflation already “ate” much of the increase. Namely, by the end of April, the overall deficit for a typical benefit was $162.60.
The Social Security payments have dropped 30% in purchasing power since 2000 due to incorrect adjustments that understate inflation and medical expenditures.
Inflation lowers savings, which can put some individuals in severe debt. And the interest on outstanding debts, especially credit card debt, will greatly impact those living on a fixed income.