Biden’s Social Security Adjustment plan leads to highest increase in 40 years

Although final results would not be announced until the fall, the federal benefits are expected to see a spike of over 9 %, according to most estimates.

The cost-of-living adjustments (COLA) to the Social Security net this year are expected to be the highest since 1981, as inflation continues to ravage the most vulnerable segments of the American society. Although final results would not be announced until the fall, the federal benefits are expected to see a spike of over 9 %, according to most estimates.

The poverty rate for Black seniors dropped from 21.4 percent to 16.3 percent over the last decade, while the poverty rate for Latino seniors dropped slightly from 20.9 percent to 19.9 percent, according to the Census Bureau’s 2010 and 2020 five-year American Community Survey. For comparison, the poverty rate for white seniors declined from 11.7 percent in 2010 to 6.7 percent in 2020 during that same period. 

“Black and Latino workers benefit substantially from Social Security because they have higher disability rates and lower lifetime earnings than white workers, on average,” Kathleen Romig, CBPP’s director of social security and disability policy, wrote in a blog post in April. 

The amount paid to the retirees and other beneficiaries of the Social Security Administration programs each year is determined based on the annual fluctuation of the Consumer Price Index for Urban Wage Earners and Clerical Workers, as seen in the three months of July, August, and September compared to the previous year. Later, the benefits are increased in the same proportion as the estimated consumer inflation in the economy found by the index. Last year, the cost-of-living adjustments were determined to be a hefty 5.9 %.

While the 2022 figure is itself quite impressive, it pales in comparison to the formidable rise in living costs experienced this year, thanks to the structural impact of the COVID-19 pandemic, as well as the ongoing War in Ukraine. The 5.9 % hike in Social Security last year was quickly outstripped by the largest rise in inflation in four decades. The 2023 figures are expected to compensate for this loss, in particular since the current inflation is expected to continue well into the next year as recession looms dangerously close.

While the official figures would not be revealed until October, several watchdogs and non-profit groups have put out their own estimates. The VA Claims Insider expects the 2023 COLA increase to be around 8.9 %, which is probably near the lower end of the spectrum. The advocacy group Senior Citizens League told the CNN it hopes for a 10.5 % raise, which would amount to nearly $175 per month for the average retiree. Other estimates are even higher, surpassing 11 % annual.

All in all, it is fairly certain the hike in COLA for the next year’s Social Security payments will be the highest in forty years, corresponding to the inflation crisis. The beneficiaries will receive an email from the SSA detailing their exact earnings sometime in December.


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