Why seniors may struggle to meet budgets even with a Social Security COLA boost
“When people are retired, if they do not have much in the way of savings — and quite a large percentage don't — that can make it very difficult when prices increase and they have nowhere to go to meet those rising costs.”
by Gianna Melillo | Oct. 14, 2022
Story at a glance
The Social Security Administration’s 8.7 percent cost-of-living adjustment announced this week marks the highest boost for beneficiaries since 1981.
Although some lauded the raise, which is automatically adjusted each year, others say it will not be enough for seniors struggling to meet rising costs.
Certain older populations are more vulnerable to economic instability while inflation rates can vary based on location.
The Social Security Administration’s announcement this week to boost its annual cost-of-living adjustment (COLA) to 8.7 percent means the average retiree can expect to see around $144 more in their monthly checks beginning in 2023.
Though the move was hailed by many who say it will help beneficiaries keep up with rising costs driven by inflation, some seniors — who make up the majority of Social Security recipients — may still struggle to pay living expenses.
That’s because a host of variable factors influence what individuals’ actual take-home pay will be next year, while poverty trends and challenges faced by vulnerable groups could compound cost-of-living unaffordability.
The National Council on Aging (NCOA), a nonprofit advocate for older Americans, deemed the 8.7 percent hike insufficient to meet the growing cost of aging.
“While this increase is historic and needed, it is also inadequate for the millions of older Americans who face skyrocketing housing and health care costs across the country,” said Ramsey Alwin, president and CEO of NCOA in a statement.
“As always, poverty is higher for women and people of color. Many of them had low wages throughout their working lives, which means they have lower Social Security benefits.”
Because $144 marks the average increase, many beneficiaries will receive sums below that amount, while the extra funds could merely off-set high prices leaving some to break-even.
The average Social Security check is also lower for women, thanks to the gender pay gap and a higher proportion of women working in part-time roles.
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https://thehill.com/changing-america/respect/poverty/3688232-why-seniors-may-struggle-to-meet-budgets-even-with-a-cola-boost/
