July's inflation numbers point to a huge Social Security benefit increase in 2023

  

Category:  News & Politics

Via:  evilgenius  •  2 months ago  •  16 comments

By:   YahooFinance

July's inflation numbers point to a huge Social Security benefit increase in 2023
There's good news for seniors living on fixed incomes: Social Security benefits could get a big boost in 2023 to keep pace with inflation.

S E E D E D   C O N T E N T



Alicia Adamczyk August 10, 2022, 4:09 PM·2 min read

Though inflation dropped in July compared to previous months, seniors could still see the highest cost-of-living adjustment (COLA) since 1981.

Inflation increased by 8.5% in July, according to the Labor Department. If it keeps increasing at that rate, the COLA will be 9.6% next year, estimates the Senior Citizens League. That's about $159 more per month, on average. The last time the COLA was that big was in 1981, when it hit 11.2%.

The Social Security COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for July, August, and September, so there are still two months' worth of data to take into consideration. But if inflation spikes again, the COLA could surpass 10%, the Senior Citizens League estimates. The actual adjustment will be announced by the Social Security Administration in mid-October.

"A high COLA will be eagerly anticipated to address an ongoing shortfall in benefits that Social Security beneficiaries are experiencing in 2022 as inflation runs higher than their 5.9% COLA" for 2022, says Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League. The organization estimates that the current average monthly benefit is short about $58 to keep pace with the cost of living.

Inflation can be particularly painful for those living on fixed incomes, including many seniors who rely on monthly Social Security checks to pay for their living expenses.

Johnson also noted that the Inflation Reduction Act, recently passed by the Senate, will also help seniors cope with rising prices thanks to its provisions to negotiate drug prices and cap out-of-pocket prescription spending for Medicare beneficiaries at $2,000 annually. In 2019, Medicare beneficiaries were spending more than $3,875 out of pocket for prescription drugs, on average.

"This legislation cuts almost $300 billion worth of high drug prices in 10 years," says Johnson. "That represents savings for taxpayers."

This story was originally featured on Fortune.com


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evilgenius
PhD Guide
1  seeder  evilgenius    2 months ago

This also applies to VA Disability. We will know sometime in October what the final number is, but it will be bigger than our current 6+ number. Another thing to note is that the Alzheimer drug Aduhelm, was 14.5% of Medicare Part B's cost increase for 2022. The cost has come way down and experts are expecting (and some are demanding) a decrease next year.

 
 
 
Ed-NavDoc
Professor Quiet
1.1  Ed-NavDoc  replied to  evilgenius @1    2 months ago

Well, I have both SS Disability and VA disability pension along with my military retirement so that's a big boost for me. I also am fortunate have TriCare for life from the military and Medicare parts A & B.

 
 
 
evilgenius
PhD Guide
1.1.1  seeder  evilgenius  replied to  Ed-NavDoc @1.1    2 months ago

I'm old enough to order off the senior menu, but not old enough to retire. I do have the VA Disability and VA medical for life (with rx copays). I work for a Medicare supplemental insurance broker agency, but I'm not an agent myself. 

 
 
 
devangelical
Professor Principal
2  devangelical    2 months ago

 cool, I retired last year.

 
 
 
Kavika
Professor Principal
3  Kavika     2 months ago

That is good news on inflation. The drug reduction doesn't take place until 2026 and the drug donut hole is effective in 2025 from the information I read.  

 
 
 
evilgenius
PhD Guide
3.1  seeder  evilgenius  replied to  Kavika @3    2 months ago
That is good news on inflation.

In other news - the stock market rallied on the news yesterday that wholesale prices fell last month as energy prices declined. 

The producer price index, which gauges the prices received for final demand products, fell 0.5% from June , the first month-over-month decrease since April 2020, the month after  Covid-19  was declared a pandemic. Economists surveyed by Dow Jones had been expecting an increase of 0.2%.
 
 
 
Kavika
Professor Principal
3.1.1  Kavika   replied to  evilgenius @3.1    2 months ago

That is good news and the market reacted to it in a big time way yesterday.

 
 
 
JohnRussell
Professor Principal
4  JohnRussell    2 months ago

If Social Security payments did not keep up with inflation (more or less) the country would have a big disaster on its hands. While its nice that monthly SS will be more , its not a boon to anyone. It is the status quo. Back in the 1930's , Social Security was 

Little did Ida May Fuller know she would find a piece of history inside her mailbox when she opened it on a February day in 1940. When the 65-year-old retiree and lifelong Republican lifted the lid of the mailbox outside the front door of her Ludlow, Vermont , house, she found a check for $22.54 from the U.S. government.

That check dated January 31, 1940, was the first payout from the Social Security program that had been enacted five years earlier by the federal government during the Great Depression .

Like everything else, Social Security has always gone up, albeit at different rates in different times depending on the rate of inflation. 

 
 
 
Greg Jones
Professor Guide
5  Greg Jones    2 months ago

With Medicare Advantage I have zero copays for maintenance meds from Optum RX

My Covid hospitalization in 2020 came to ~$100,000....my share was $90 for the ER visit.

 
 
 
Just Jim NC TttH
PhD Principal
5.1  Just Jim NC TttH  replied to  Greg Jones @5    2 months ago

Mine was $160K and they picked all of it up....................

 
 
 
Sparty On
Professor Principal
5.2  Sparty On  replied to  Greg Jones @5    2 months ago

I’m happy for you but it doesn’t take a rocket engineer to see the issue withthat.    We are just kicking the can further down the road for our kids, grandkids and great grandkids to fix.

Both Medicare and SS are not self sustaining without more revenue (taxes).    If we could keep congresses hands off it I would raise the pay in wage to say 500k-1000k a year and then index it to inflation.

It would increase the future stability of both programs significantly.    The key being, making sure Congress can’t touch it or change it significantly operationally like paying SS benefits to illegal aliens or some such nonsense.

 
 
 
Snuffy
Masters Guide
5.2.1  Snuffy  replied to  Sparty On @5.2    2 months ago
Both Medicare and SS are not self sustaining without more revenue (taxes).    If we could keep congresses hands off it I would raise the pay in wage to say 500k-1000k a year and then index it to inflation.

Agreed.  I had posted this prior and the only responses I got back were basically from those against changing things as it might impact their plans.  Without some sort of fix Medicare runs out of money in 2028 and Social Security runs out in 2037.  At that point I believe they take in sufficient funds to pay at a level of 70% of current payments.  

  1. Perhaps it's time to again move the full retirement age for eligibility.  When SS was first created with a full retirement age of 65 the average life expectancy was 64.5.  With current life expectancy in the 70's perhaps it's time to revisit eligibility dates and move full retirement age up to 70.  And move the Medicare eligibility age to match the full retirement age.
  2. Remove the income cap for payments to increase the taxable maximum.
  3. Increase payroll taxes, while currently at 6.2% perhaps increase to 7%.
  4. Move politicians out of their special retirement programs and have them also participate in Social Security for their retirement.

Removing the income cap and increasing the payroll tax by a modest .8% would bring in a lot more funding to the programs and help extend the lifespan.  I also think it's really time to move the full retirement age again.  They did it years back and I believe it's time to do so again, in a grandfathered and graduated way of course.  But I would definitely move the Medicare eligibility date to match the full retirement age, similar to how it was back in the beginning.

And forcing politicians out of their special retirement programs and into Social Security would give them an incentive to be more proactive in watching and fixing issues instead of just kicking the can down the road as it would directly impact them.

 
 
 
Sparty On
Professor Principal
5.2.2  Sparty On  replied to  Snuffy @5.2.1    2 months ago

Yep but make sure Congress can’t raid it.

That doesn’t happen and I’m against any tax increases to fund it.

 
 
 
evilgenius
PhD Guide
5.2.3  seeder  evilgenius  replied to  Sparty On @5.2    2 months ago
The key being, making sure Congress can’t touch it or change it significantly operationally like paying SS benefits to illegal aliens or some such nonsense.

There is a small group of far right in Congress like Rick Scott and Ron Johnson who want to move SS and Medicare to discretionary spending so that any party in the majority could fuck with it every year. It a very bad and very unpopular idea.

 
 
 
Sparty On
Professor Principal
5.2.4  Sparty On  replied to  evilgenius @5.2.3    2 months ago

I won’t defend anyone with that stance if true but don’t fool yourself.    SS and Medicare has been Democrats slush fund many times in the past and would be again in the future if left up to Congress.

I don’t give a shit which side tries to raid it.   It’s wrong and is worthy of a Constitutional Amendment that protects it without proxy and won’t allow Congress to fuck with it.

Period.

Such an Amendment would undoubtably pass if put to the people but it will never happen.    Too many shysters in Congress on both sides.

 
 
 
Revillug
Freshman Guide
6  Revillug    2 months ago

It's great that Soc Sec is indexed to inflation because very few pensions are. Even with the increases pegged to the official inflation rates purchasing power is for Soc Sec recipients is probably going to be falling behind.

Am additional downside is that many of us on fixed incomes will find our taxes increasing as the brackets and thresholds are still stuck in the past. 

A far better situation for most people in this economy would be stable prices.

 
 

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