As millions of Social Security recipients are likely now aware, the Social Security Administration recently confirmed that there will indeed be a 5.9 percent cost of living adjustment (COLA) beginning next year.
That sizeable bump—the biggest boost to the benefits seen in four decades—is slated to raise retirees’ monthly payments by roughly $90 to an estimated average of $1,657, and a typical couple’s benefits will climb by approximately $150 to $2,754 per month.
The nearly 6 percent increase indeed looks great on the surface, but how much of that extra cash will actually end up in the pocketbooks of struggling seniors? In the current high-inflationary environment, it might only offset the fast-rising costs for goods and services. In fact, the Consumer Price Index data for last month showed that the cost of consumer goods surged to a record 6.2 percent from one year ago—which is the largest jump witnessed in more than thirty years.
“Over the past twenty-one years, COLAs have raised Social Security benefits by 55 percent but housing costs rose nearly 118 percent and healthcare costs rose 145 percent over the same period,” Mary Johnson, the Social Security and Medicare policy analyst for the Senior Citizens League, said in a statement.
“COLAs are intended to protect the buying power of Social Security benefits but, according to consumer price data through July of 2021, Social Security benefits have lost nearly one-third of their buying power, 32 percent, since 2000, about the length of a typical retirement,” Johnson said in the statement. “Even worse, it appears that inflation is not done with us yet, and the buying power of Social Security benefits may continue to erode into 2022.”
So, with this in mind, what exactly are the expenses that will continue to eat away at seniors’ Social Security checks? Here are five of them, as identified by the Senior Citizens League.
Food prices for home consumption are expected to increase between 1.5 percent and 2.5 percent. Meanwhile, food prices for food purchased away from home will climb between 3 percent and 4 percent.
The group has claimed that seeing rental increases of 7 percent or higher will be more common beginning next year. For comparison, rent increases of about 5 percent are more often the standard.
Homeowners won’t be immune from inflation continuing to creep higher. “Rising costs are expected to affect homeowners as well, particularly for people who are planning to move, or renovating an older home,” according to the Senior Citizens League. “Mortgage rates are expected to rise in 2022 in reaction to higher new home prices, the costs of building and materials, and rising interest rates.”
The cost to heat a home with natural gas and oil are slated to rise between 21 percent and 25 percent this winter, according to the U.S. Energy Information Administration.
Data released by the Centers for Medicare and Medicaid Services suggest that premiums for prescription drug plans will climb by nearly 5 percent next year.
Ethen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.