Retirees Furious: Why a $48 Social Security Hike is Sparking Outrage
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After years of hard work, American retirees expect some financial stability in their golden years. But the recent $48 increase in Social Security checks has left many seniors frustrated.
At The GrayVine, we understand how important every dollar is in retirement, so let’s break down why this Cost-of-Living Adjustment (COLA) is causing such an uproar.
The Social Security Administration's anticipated COLA increase of 2.5% for the next year is a decrease from the 3.2% growth this year and the 8.7% increase in 2023.
This modest bump is expected to be the lowest since 2021, raising the average Social Security payment by about $48 per month based on the current average monthly benefit of $1,907.
But with the rising cost of living, this increase feels more like a drop in the ocean rather than the lifeline many retirees need.
One of the critical factors diluting the impact of the COLA increase is the expected rise in Medicare Part B premiums. With a projected increase of $10.30 to $185 per month, the higher premiums will consume a significant portion of the COLA, leaving retirees with less to spend on other essentials.
Since Medicare Part B premiums are deducted directly from Social Security benefits, any increase effectively reduces the net gain from the COLA.
Take Susan, a 71-year-old from central Virginia, as an example. She told MarketWatch that the $48 monthly increase is far from sufficient to cover her family's needs.
With a weekly grocery bill of $300, supplemented by venison from her husband's hunting, the COLA raise barely makes a dent in her expenses. Add to that the rising costs of utilities, pet care, and necessary home repairs, and it's clear that the COLA increase is not keeping pace with the financial realities facing many retirees.
Susan's story is not unique. Research by the National Council on Aging and LeadingAge LTSS Center at UMass Boston indicates that over half of seniors aged 60 and older cannot meet their basic needs for housing, food, transportation, and healthcare.
In a similar story, a report shows that Americans relying on government money has greatly increased since 1970.
The Elder Index, which calculates the income required to cover these essentials, shows that 49.6% of older adults, or over 27 million households, fall short. The pandemic has only exacerbated these challenges, with a 5% increase in households struggling to meet basic needs in just two years.
The financial landscape for many seniors is bleak.
The LeadingAge LTSS Center at UMass Boston report reveals that 60% of older individuals saw a decline in their total assets between 2018 and 2020, with 15 million households having no assets at all.
The median income for the bottom 20% of Americans over 60 was a mere $18,000 in 2020, with over 90% of this group earning below the Elder Index threshold.
The situation is dire and calls for urgent action. The country is in the throes of a crisis that is only worsening with time. The COLA increase, while necessary, is insufficient to address the growing disparity between the cost of living and the incomes of retirees. It's a clear indication that our system may need improvements to ensure seniors can live with dignity and financial security.
Have you felt the pinch of the COLA increase? What changes would you like to see to better support retirees? Share your thoughts and experiences in the comments below.
At The GrayVine, we understand how important every dollar is in retirement, so let’s break down why this Cost-of-Living Adjustment (COLA) is causing such an uproar.
The Bitter Pill of a Modest Increase
The Social Security Administration's anticipated COLA increase of 2.5% for the next year is a decrease from the 3.2% growth this year and the 8.7% increase in 2023.
This modest bump is expected to be the lowest since 2021, raising the average Social Security payment by about $48 per month based on the current average monthly benefit of $1,907.
But with the rising cost of living, this increase feels more like a drop in the ocean rather than the lifeline many retirees need.
The expected rise in Social Security checks is deemed insufficient for many retirees in the US who are struggling with the cost of living. Image source: Pexels.
The High Cost of Healthcare
One of the critical factors diluting the impact of the COLA increase is the expected rise in Medicare Part B premiums. With a projected increase of $10.30 to $185 per month, the higher premiums will consume a significant portion of the COLA, leaving retirees with less to spend on other essentials.
Since Medicare Part B premiums are deducted directly from Social Security benefits, any increase effectively reduces the net gain from the COLA.
Real Stories, Real Struggles
Take Susan, a 71-year-old from central Virginia, as an example. She told MarketWatch that the $48 monthly increase is far from sufficient to cover her family's needs.
With a weekly grocery bill of $300, supplemented by venison from her husband's hunting, the COLA raise barely makes a dent in her expenses. Add to that the rising costs of utilities, pet care, and necessary home repairs, and it's clear that the COLA increase is not keeping pace with the financial realities facing many retirees.
A Widespread Issue
Susan's story is not unique. Research by the National Council on Aging and LeadingAge LTSS Center at UMass Boston indicates that over half of seniors aged 60 and older cannot meet their basic needs for housing, food, transportation, and healthcare.
In a similar story, a report shows that Americans relying on government money has greatly increased since 1970.
The Elder Index, which calculates the income required to cover these essentials, shows that 49.6% of older adults, or over 27 million households, fall short. The pandemic has only exacerbated these challenges, with a 5% increase in households struggling to meet basic needs in just two years.
Diminishing Assets and Inadequate Incomes
The financial landscape for many seniors is bleak.
The LeadingAge LTSS Center at UMass Boston report reveals that 60% of older individuals saw a decline in their total assets between 2018 and 2020, with 15 million households having no assets at all.
The median income for the bottom 20% of Americans over 60 was a mere $18,000 in 2020, with over 90% of this group earning below the Elder Index threshold.
The situation is dire and calls for urgent action. The country is in the throes of a crisis that is only worsening with time. The COLA increase, while necessary, is insufficient to address the growing disparity between the cost of living and the incomes of retirees. It's a clear indication that our system may need improvements to ensure seniors can live with dignity and financial security.
Have you felt the pinch of the COLA increase? What changes would you like to see to better support retirees? Share your thoughts and experiences in the comments below.
