Millions of older folks are now struggling to make ends meet and cannot afford housing, food, or healthcare; the upcoming Social Security check increase will not alleviate this situation. The Social Security Administration anticipates that the next COLA rise may not be sufficient for retirees who are already struggling owing to rising consumer expenditures.
According to Mary Johnson, an independent Social Security and Medicare researcher, the COLA announcement is set for October 10, and analysts expect a small 2.5% increase amid declining inflation.
This is a reduction from the 3.2% rise seen this year and the 8.7% increase expected in 2023. The nonpartisan Senior Citizens League believes that the average COLA rise over the last 20 years has been around 2.6%.
Retired Americans Are Angry With the Impending Small Rise in Social Security Benefits
It is projected that the COLA increase will be the lowest since 2021. In 2025, it would increase the average Social Security payment by over $48 per month. This is based on the current average monthly payment earned by retirees, $1,907, according to the Social Security Administration.
The Medicare Part B premium is expected to rise by $10.30 to $185 per month from its current $174.70, reducing a portion of the COLA. Because Medicare Part B is deducted directly from Social Security income, any increases in Medicare will offset some of the COLA gains.
Susan, a 71-year-old lady from central Virginia, told MarketWatch that her monthly Social Security stipend of $48 is insufficient to cover her family’s expenses. She lives primarily on Social Security and spends $300 per week at the food store, supplemented by venison from her husband’s hunting trips.
Susan says the monthly payment makes little difference to their income. Furthermore, the 71-year-old woman stated that, while gas costs have dropped, her electric bill has risen, and the veterinarian bills for her two dogs have grown dramatically. Her house required a new roof, as well as a replacement of the appliances and HVAC system. A COLA rise cannot cover these expenses.
Approximately Half of Seniors in the United States Are Unable to Meet Their Basic Needs of Housing, Food, Transportation, and Healthcare
According to a new study from the National Council on Aging and the LeadingAge LTSS Center at UMass Boston, the expected COLA increase comes when more than half of seniors aged 60 and up are unable to satisfy their basic needs for housing, food, transportation, and healthcare.
The Elder Index is used to assess basic needs, and research indicates that 49.6% of older people, or more than 27 million households, are unable to meet these expectations. The most recent available data, from 2020, showed that the pandemic’s full impact had not yet been felt and that families had grown by nearly 5% in just two years.
Furthermore, the Elder Index calculates how much money different age groups need to cover their basic costs, age in place, or keep their freedom in their homes as they get older. It focuses on the basic needs of housing, transportation, Medicare payments, and food, including the most economical meal plan that meets USDA nutritional standards. It forbids recreation, pleasure, and eating away from home. According to the survey, 60% of older people saw their total assets decrease between 2018 and 2020, despite a minor increase in income.
In reality, 15 million households, or the bottom 20% of Americans over 60, lacked assets, and some were even in debt. In 2020, this group’s median income was $18,000. More than 90% of this group’s households earned less than the Elder Index cutoff.
According to a paper co-authored by Marc Cohen of the LeadingAge LTSS Center at UMass Boston, despite financial gains, millions of older persons continue to live on the edge. The situation is unsustainable, as it deteriorates and becomes a crisis. The report emphasizes the importance of immediate action, as the country is currently experiencing the worst of a crisis.