The Social Security Administration announced that the cost of living adjustment (COLA), which represents an increase in social security benefits to counter inflation, has increased by 1
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The expected average monthly benefit has increased by $ 20 per month for 2021, CNBC reports. However, this increase is not enough to take into account the rising costs for older people.
Senior Citizens League, one of the largest non-partisan groups for the elderly, surveyed 1,125 participants from mid-January to April 20, 2021. According to their data, over 62% of retirees believe that adjustments to the cost of living on social security need guaranteed minimum 3%.
“When the prices of the goods and services on which retirees depend go through the roof, their social security benefits do not buy as much and this causes enormous financial stress for all retirees,” said Mary Johnson, an analyst with social security policy for the League for the Elderly. , in a press release.
The league said it was working with Congress to increase retirement benefits to a 3% guaranteed minimum and to use the Consumer Price Index for the Elderly or CPI-E.
The latest decision to adjust the cost of living is based on an increase in the consumer price index for urban workers or CPI-W from the third quarter of 2019 to the third quarter of 2020; however, inflation has risen 1.4 percent since last year in the first quarter of 2021. The CPI-W was more than 3 percent higher at the end of March than the previous year, according to CNBC.
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The largest increase in COLA was in 2008 by 5.8%. Since 2010, the average increase is 1.4%, according to data from the Social Security Administration. The increase in the monthly social security benefits will be determined by the CPI data by September.
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This article originally appeared on GOBankingRates.com: Social Security Cost Adjustments Are Not Enough to Pay Higher Costs for the Elderly