The good news is that COLA which is the Social Security Administration’s Cost-of-Living Adjustment has gone up by 5.9%. this means more money. Some government policy means more income while some mean more spending. 2 incoming sharks are ready to swallow up the social security payments.
The 2 Sharks
Especially retirees who are dependent on social security as their main source of income might live worse than before after these 2 sharks attack them in 2022. These sharks are the 2 pieces of bad news we will analyze in what comes next.
Prices of things are going up.
There are some commodities and services that when they go up does not bother a 62-year-old person. For instance, gold or prices of designer wears going up. But when essential commodities like the price of groceries, price of fuel starts to go up, it will affect everyone including retirees that depends on social security payments.
According to the price index report from the U.S. Bureau of Labor Statistics, The inflation report in November 2021, shows that prices were high by 6.8% which is the highest in 39 years. A year-over-year comparison of the Consumer Price Index for All Urban Consumers (CPI-U) in October 2021 showed that prices are up 6.2% from the prior year. All these are pointing towards the same direction that prices of things are going up.
The increase in Social Security’s COLA was brought about comparing the Consumer Price Index of July, August, and September of 2021 with that of the prior year and it was discovered that there was a 5.9% inflation. This was why social security was increased by 5.9%.
Let’s consider the second shark that is ready to swallow up the 5.9% increase of the SSA’s COLA.
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The 14.5% Increase of Premium Medicare.
Retirees are expected to apply for Medicare 3 months before they clock the age of 65. A percentage of the Medicare premium is deducted from their social security payments. Medicare Part B is deducted from their social security checks. This Medicare premium part B is what pays for routine care. Who needs a lot of routine care better than 65 years plus retiree.
In 2020, the standard monthly premium will jump from $148.50 to $170.10, the Medicare Part B deductible will increase in 2022 from $203 to $233.
These changes are the sharks that are expected to eat up the 5.9% increase of the COLA as well as eat up a huge percentage of the Social Security Payments. The prices of the major things an old person needs will be going up.
Food and medical care. An old person doesn’t care about a lot of things; the few things that matter will go up and the SSA’s paycheck might not be sufficient to cater for our old in 2022.