Not exactly a bright spot, but it is A sign of the times.
Social Security recipients are almost certain to receive a record cost-of-living adjustment next year as inflation remains stubbornly at its highest level in 40 years. KTLA Reports.
The Bureau of Labor Statistics reported Wednesday that the consumer price index rose 9.1% in June from a year earlier.
That is well above the 8.6% rate seen in May and beat the 8.8% rate expected by many economists.
The nonpartisan League of Senior Citizens now estimates that Social Security recipients will receive a 10.5% cost-of-living adjustment by 2023.
That would translate to an increase in average monthly checks from $175.10 to $1,668.
Just two months ago, the group was forecasting an 8.6% increase for next year.
Nothing is fixed. The Social Security Administration tabulates annual cost-of-living adjustments based on third-quarter data, and we’re not there yet.
The next few months, in other words, will be crucial.
And there’s another wild card: Medicare.
Medicare Part B premiums are usually deducted from Social Security checks. In other words, a significant increase in health care costs could mitigate the increase in the cost of living.
And keep in mind that the larger the Social Security checks, the faster the program’s trust funds will be depleted.
That doesn’t mean Social Security is going bankrupt, as some like to say. But it does mean that the program will struggle to meet its financial obligations.
Current estimates say trust funds will run out of money by 2035, at which point Social Security will only be able to cover about 80% of current benefits.
In the past, lawmakers have addressed such shortfalls through higher taxes and/or reduced benefits. This is exactly how the show was designed: a perpetual work in progress.
In the current political climate? Well, it’s very easy to imagine irresponsible legislators making difficult decisions and creating an unnecessary crisis.
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