According to AARP, the current COLA estimate anywhere from a 4.5% increase to a 6.1% increase, depending on the experts estimating. The larger-than-normal estimates are driven by the inflation seen this year as society begins to relax restrictions.
Why COLA Estimates Continue To Rise
The larger-than-normal estimates are driven by the skyrocketing prices seen this year. Specifically, AARP notes, the rise in energy costs. The article notes that the rise in energy costs can be attributed to the “disarray caused by the pandemic.”
However, it’s not just energy costs that are skyrocketing. Other essentials, like food, have also seen significant price increases, CNBC reports.
Some experts indicate that the increased costs are merely transitory as the world readjusts back to life outside a pandemic. Even if this is true, all of these additional costs are taking a toll on many seniors who rely on fixed incomes.
The Problem Many Face: Navigating Increasing Costs With Fixed Monthly Incomes
Many retirees rely on a fixed income each month, and their Social Security benefits tend to make up a significant portion of this income.
However, this causes a problem; due to a fixed income, the skyrocketing inflation is much more difficult for seniors to navigate. Oftentimes it means cutting costs wherever possible, changing the lifestyle they have grown accustomed to. As Brad Lineberger, a certified financial planner, told CNBC, “inflation is the silent killer. It can erode purchasing power to the point where someone wakes up and can’t live the lifestyle they once did because they can’t afford to.”
However, seniors have already seen the purchasing power of their benefits decrease. Over the past two decades, the purchasing power of Social Security benefits has decreased 30%. This decrease in purchasing power is already a struggle for seniors, and to watch benefits’ purchasing power decrease further is unfathomable.
How much more will this post-pandemic inflation affect beneficiaries’ purchasing power? Why should seniors navigate this difficult financial situation alone?
Seniors Deserve More Financial Security
Senior Security Alliance is working to ensure senior citizens have more financial security. And, although this large COLA could a great start, it is not enough.
Senior citizens deserve COLA calculations that account for the rising healthcare costs as well as inflation seen elsewhere. This additional calculation would provide senior citizens with more finances to pay for medical costs, therefore providing more financial security. That is why we created a game-changing bill.
This bill, The Senior Citizens Bill of Rights, guarantees retirees seven rights that help ensure a more financially secure future for seniors nationwide. To learn more about our bill, the seven rights outlined, and how you can help, be sure to check out our page.
