America’s senior citizens and the retirement community may feel additional financial strain in recent months, as their Social Security payments fell short last year.
According to the nonpartisan League of Senior Citizens, the cost of living rose sharply in 2022, and inflation-adjusted payments to Social Security recipients fell in the same year. This resulted in a 46% gap in the monthly benefit checks received by 70 million Americans.
Social Security recipients received a 5.9% cost-of-living adjustment (COLA) last January, increasing the average benefit check by $92.30, from $1,564 in 2021 to $1,656.30 in 2022, the organization said.
Still, the league said the 5.9% inflation adjustment averaged 46% less than actual inflation each month.
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This estimated discrepancy would result in the average Social Security benefit check falling by more than $42 per month and by more than $508 in 2022, according to their report.
“As Social Security recipients await an 8.7% increase in Social Security benefits in January, inflation in 2022 has taken a toll on retirees’ budgets,” the league said in a statement. “Many retirees have had to spend through savings much faster than planned, and those without savings have turned to food pantries and low-income assistance programs in greater numbers.”
The inflation-adjusted level was calculated using 2021 figures as measured by the Consumer Price Index.
The annual inflation rate for 2021 was 7%, but the Social Security benefit adjustment is calculated solely on the basis of third quarter reports of changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
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The third quarter runs from July 1 to September 30.
In the third quarter of 2021, the CPI-W increased by 5.9%. That figure jumped to 7.4% at the end of the fourth quarter, allowing seniors even through early 2022.
Going into 2023, these rates have been adjusted again.
As of January 2023, Social Security benefits have increased by 8.7%, or about $140, bringing the average check to about $1,800.
This increase was again calculated using the third quarter inflation rate; Inflation was 7.1% in November, down from a shockingly high 9.8% in June.
Federal agencies predict that 2022 will end with annual inflation of 7% to 8.01%.
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While senior citizens look forward to the 2023 Social Security benefit increase, many are still struggling with the 2022 shortfall between their inflation and Social Security benefits.
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The Senior Citizens League reported that 33% of senior citizens applied for food stamps or visited a food pantry this year, compared to 22% last year, and that 17% applied for assistance with heating costs last year. compared to 10%. to a recent study.
The Associated Press contributed to this report.