The latest report from the Seniors Citizen League showed that retirees on Social Security have lost about 36% of their buying power. This is worrying especially if some of these seniors rely on these benefits and have a low income.
Skyrocketing prices have caused a lot of financial difficulties for millions of Americans relying on Social Security. What is more, the Administration could run out of funds to pay 100% of benefits in about ten years. Unfortunately, this will only bring cuts.
PROPOSAL TO USE CPI-E TO CALCULATE SOCIAL SECURITY
The Administration uses the Consumer Price Index for Urban Wage Earners and Clerical Workers to work out COLAs annually. However, this may not be enough because it does not reflect the needs or expenses retirees have in the USA.
What is more, SSA claims that if the Consumer Price Index for the Elderly’s were used instead, retirees could get about 0.2% extra annually. The thing is this has not got the approval yet in Congress.
However, several bills have been proposed to change the way Social Security increases benefits. Take for example the Protecting and Preserving Social Security Act or the S. S. Expansion Act.
SOCIAL SECURITY COULD USE THE HIGHEST CPI
Again, this is just a proposal, but some lawmakers believe that the Administration should use the highest Consumer Price Index. In this way, retirees will always receive the best and highest COLA increase.
Therefore, if the CPI for the elderly were higher than the one for Urban Wage Earners and Clerical Workers, SSA would use the highest. Apparently, this measure could be slightly better than the previous one with a 0.3% boost. This is because Social Security recipients could have more chances to an increase.
Unless there was no inflation, they could benefit from a benefit increase. Rep. John Larson introduced the Social Security 2100 Act, favoring this change. Nevertheless, these changes do not seem to be something that could happen in the short term.
