Well, it looks like millions upon millions of elderly Americans will be getting the biggest raise of their lifetime. It turns out that folks who collect Social Security will be getting MUCH higher monthly payouts thanks to the annual adjustment for inflation. I guess elderly folks can thank Biden for that, sort of, no really, anyway, the announcement came on Thursday, and we’re being told that this will be the highest increase in 4 decades.
Wow. Biden’s inflation really is HIGH, isn’t it?
Maybe people will now have enough to buy a carton of yogurt. I told you how a carton of plain, boring yogurt that I used to pay 3 bucks for is now SIX DOLLARS. It’s insane how high these prices are and honestly, I don’t know how some people are managing.
Of course, there is a lot of controversy surrounding this move, which is also called a cost-of-living adjustment. Many critics believe government data is outdated and doesn’t actually reflect the struggles that seniors are facing right now in Joe Biden’s terrible economy. Also, the increase is the same for everyone, so elderly folks get the same amount regardless of where they live or if they’re wealthy.
The Washington Times wrote a really informative piece on this move. Here are some highlights:
WHAT’S THE BIG DEAL?
The U.S. government is about to announce an increase to how much the more than 65 million Social Security beneficiaries will get every month. Some estimates say the boost may be as big as 9%.
WHAT DO BENEFICIARIES HAVE TO DO TO GET IT?
WILL THIS BE THE BIGGEST INCREASE EVER?
No, but it’s likely the heftiest in 40 years, which is longer than the vast majority of Social Security beneficiaries have been getting payments. In 1981, the increase was 11.2%.
WHEN WILL THE BIGGER PAYMENTS BEGIN?
January. They’re also permanent, and they compound. That means the following year’s percentage increase, whatever it ends up being, will be on top of the new, larger payment beneficiaries get after this most recent raise.
HOW BIG WAS THIS PAST YEAR’S INCREASE?
5.9%, which itself was the biggest in nearly four decades.
WHAT’S THE TYPICAL INCREASE?
Since 2000, it’s averaged 2.3% as inflation remained remarkably tame through all kinds of economic swings. During some of the toughest years in that stretch, the bigger worry for the economy was actually that inflation was running too low.
Since the 2008 financial crisis, the U.S. government has announced zero increases to Social Security benefits three times because inflation was so weak.
SO THE INCREASE IS TO MAKE UP FOR INFLATION?
That’s the intent. As Americans have become painfully aware over the past year, each $1 doesn’t go as far at the grocery store as it used to.
HAS SOCIAL SECURITY ALWAYS GIVEN SUCH INCREASES?
No. The first American to get a monthly retirement check from Social Security, Ida May Fuller from Ludlow, Vermont, got the same $22.54 monthly benefit for 10 years.
Automatic annual cost-of-living adjustments didn’t begin for Social Security until 1975, after a law passed in 1972 requiring them.
HOW IS THE SIZE OF THE INCREASE SET?
It’s tied to a measure of inflation called the CPI-W index, which tracks what kinds of prices are being paid by urban wage earners and clerical workers.
More specifically, the increase is based on how much the CPI-W increases from the summer of one year to the next.
I’d encourage you to read the entire article because there’s more info. You read all of it here.
This post originally appeared on WayneDupree.com.