Did you notice the raise you received in your Social Security check this year? It came to 0.3 percent, in real dollars around $4, barely enough to pay for the cost of an extra Lipitor pill.
Five years now, they’re over 60 million Americans who depend on Social Security have received nada or low increases in their cost of living adjustments (COLA) each calendar period.
Not only that, older Americans have had to settle with rising costs shattering their household expense budget with most essential items: medical expenses, housing and food costs.
Don’t tell me you haven’t felt it? Our government is not close to the needle of seniors who are on fixed incomes and find their needs changing with more medical services and prescription drugs become a critical part of their retirement life. And the price of just surviving–our intake of food—is hitting our senior Americans creating less in the stomach and less in the pocketbook.
Is the cause of the stringy belt-tighting process of our yearly cost of living adjustment the output of government bureaucrats scheming in the catacombs of Washington D.C. Not exactly, the process of determining the COLA is meant to be fair. But it’s not. It’s set up incorrectly to not benefit the millions of senior citizens.
“The annual COLA is simply not doing the job of protecting the buying power of older Americans, “ said Mary Johnson, a policy analyst for the Senior Citizens League (TSCL), a retirees’ advocacy group.
COLA works this way. Social Security Administration adjusts yearly benefits upward for inflation. In 2015, the consumer price index showed very low inflation so Social Security gave no raise at all.
The problem is the index is not tied to the needs of older Americans. Instead the COLA is set for Urban Wage Earners and Clerical Workers (CPI-W). Younger workers spend less of their income on medical costs, and spend more on transportation (gasoline), a category that have been reduced dramatically in costs in recent years.
In short, the needs of older Americans are understated in the analysis of the COLA results. A better choice would be to include the elderly (CPI-E) to include greater emphasis on healthcare and housing. These are stronger needs for older fixed income Americans. In that way, for example, a senior would be paid a COLA of 0.6 percent in 2016 instead of zero, and 1.5 percent this year instead of 0.3 percent.
Anything on the horizon to fix this discrepancy accorded to our senior citizens? There is a piece of legistration winding its way through Congress entitled the Social Security 2100 Act (H.R. 1902) that would lengthen the life of and improve Social Security for all Americans.
Honing in on the index for the elderly, according to Johnson, the current average monthly benefit of about $75 would increase the income of retirees. The Senior Citizens League believes the SS reform bill would go a long way in ensuring the retirement security that older Americans have earned and deserve.
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