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Published On: Tue, Nov 13th, 2018

Social Security Checks Will Increase in 2019 as Inflation Rises

Tens of millions of Americans who receive Social Security will see a 2.8% increase in their benefits next year, as inflation rises. For baby boomers, the increase is the biggest yet.

After a period of low inflation, the cost-of-living adjustment (COLA) for 2019 is the highest rate in seven years. That equates to about $39 a month for the average retiree, according to estimates from the Social Security Administration.

The COLA will affect budgets for one in five Americans, including disabled veterans, Social Security beneficiaries and federal retirees. That equates to about 70 million people, which is enough to have an impact on the economy.

Image/geralt

One advantage Social Security offers over private pensions is that it offers inflation protection. Beneficiaries gain from compounding, as COLAs become part of the underlying benefit.

The increase comes as many people on Social Security struggle to make ends meet. The benefits boost will help many Americans enjoy a higher quality of living.

According to https://www.mooreandhedges.com/, “Consistent monthly payments make it possible to pay rent/mortgage, purchase food, buy clothing, and take care of other necessities.” But many retirees and their advocates say the increase is still too small and does not reflect higher health care costs for the elderly.

Medigap insurance costs are also rising as well as prescription drug plan costs. In some cases, these health care costs negate the higher Social Security payments. Rent costs are also rising for many retirees.

Advocates for seniors are calling for the government to switch to an index that is reflective of the pending patterns of seniors. Seniors are spending their money in categories that are rising at a higher rate than overall inflation.

COLA is currently based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. The index measures price changes for housing, food, transportation, clothing, medical care, energy, education and recreation.

Advocates for seniors are pushing for an experimental index that would track the costs for households headed by those aged 62 and older.

Due to rising costs unique to seniors, retirees have seen a 34% decline in their purchasing power since 2000, according to the Senior Citizens League.

Taking COLA into account, the estimated average monthly Social Security payment for retired workers will be $1,461 next year.

COLAs can be small, or they can be zero, as was the case in recent years. While the 2.8% increase sounds exciting, monthly checks won’t be too much higher than they are right now. Typical retirees will see a $39 boost to their monthly checks, which equates to nearly $500 by the end of the year.

Author: Jacob Maslow

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  1. jakee308 says:

    They leave out what the increase in the premium for part B coverage in medicare. They do this all the time they raise the amount of the monthly payment and then claw most of it back by forcing an increase in the part b by about half of the increase.

    just bureaucratic paper shuffling. The seniors dont’ get squat and because they use a irrelevant metric the cola hasn’t kept seniors from losing a lot of ground. you write about it but don’t really point out how fixed the game is.

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