Retirees will have a lot of catching up to do with the 8.7% raise that’s coming to their Social Security checks next year.
That’s because the 5.9% increase to benefits for 2022 was no match for the inflation that older adults experienced this year. From January through December, the 5.9% cost-of-living adjustment fell short of actual inflation every month by 46% on average. That left the average Social Security benefit of $1,656 short by more than $42 a month, according to a new study by the Senior Citizens League.
To cope with this loss of purchasing power, many retirees have had to dip deeper into their savings than planned, while those without savings have had to turn to food pantries and low-income assistance programs in greater numbers, the Senior Citizens League reported. Even some retirees with more of a financial cushion have chosen to dial back their spending and table plans for travel or other discretionary pleasures.
Signs point to an easing of inflation, which would take some pressure off seniors’ pocketbooks. The consumer-price index rose 7.1% in November over the same time last year, less than experts had forecast. To the extent that prices moderate over the next year, older adults can use their outsize cost-of-living adjustment to pay off debt or boost savings.
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