“The just announced 2.5% Social Security COLA is a disappointment for American seniors. It’s the lowest COLA in four years (2020 saw a 1.3% increase). The only silver lining is that general inflation is coming down. But the costs of the goods and services seniors need continues to rise disproportionately.
The average Social Security benefit will rise to $1,976 — or an extra $49 per month. But some of that benefit boost will be consumed by the estimated increase in the monthly Medicare Part B premium of $10.30.
We have said for years that current Social Security COLAs are inadequate. In the past ten years, the COLA has been as low as .3 percent and in 2015 it was ZERO.
Seniors need a fairer and more accurate COLA formula. The traditional formula (CPI-W) does not fully account for the impact of inflation on the goods and services seniors spend the most money on — especially health care[1] and housing.
We support the adoption of the CPI-E (Consumer Price Index for the Elderly) – an inflation index that more accurately reflects seniors’ true costs. It puts more emphasis on the inflation rate of health care and housing, among other expenses that seniors confront.
Rep. Ruben Gallego (D-AZ), Rep. John Garamendi (D-CA), Senator Bob Casey (D-PA), and others in Congress have introduced legislation to adopt the CPI-E as the inflation standard for Social Security COLAs. We strongly support these bills. Social Security benefits are already modest; seniors struggling to meet expenses every month must have an adequate COLA to keep their heads above water financially.” – Max Richtman, President & CEO, National Committee to Preserve Social Security and Medicare
###
Media inquiries:
Walter Gottlieb
ncpssm.org
[1] Seniors spend more on health care than other groups, and health care costs continue to rise faster than the rate of general inflation. This year, the cost of medical services increased 3.4%, but seniors are only receiving a 2.5% COLA.