Your Social Security check may not feel quite as fat as you had hoped this year.
Each fall, the federal government announces how much Social Security payments will rise for the following year. But it turns out that the increase announced last October does not feel quite as large as many had hoped.
In fact, 63% of participants in a survey by the Senior Citizens League say their 2021 cost-of-living adjustment — which was 1.3% — raised their net monthly Social Security benefit by less than $15.
The Social Security Administration had projected in October that the 1.3% COLA would increase the average monthly Social Security retirement payment by $20.
What accounts for the lower boost than expected in Social Security benefits? There also was an increase this year in the Medicare Part B premium, which generally is deducted from a senior’s Social Security payment.
The Senior Citizens League notes that 65% of retirees in the survey say their 2020 monthly household expenses rose by more than $80 — with 40% saying such expenses were up by $120 or more.
Food prices in particular are climbing, with the cost of fresh fruits and vegetables rising due to crop damage from severe weather and wildfires, the league says.
And the situation may get more difficult for seniors. As the league notes in a press announcement:
“Some economists and policy makers worry that the new economic stimulus will cause consumer prices to spiral. Consumer price index data through February showed a big jump in some prices and suggests that the next Social Security COLA may in fact be much higher — the highest since 2019 when the COLA was 2.8%.”
Although a large COLA increase would be welcome, higher prices could wipe out those gains, the league says. It advocates “tying the annual COLA to a consumer price index that more closely reflects the spending patterns of older Americans.”
Wondering when is the best time to claim Social Security benefits? Stop by Money Talks News’ Solutions Center and learn about expert, low-cost help that can ensure you get the most from this retirement program.
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