Thanks to rampant inflation that is everywhere and no longer merely transitory, nearly 70 million American retirees will finally receive the biggest pay boost in over 40 years.
On Wednesday, the Social Security Administration announced that it will raise Social Security and Supplemental Security Income benefits by 5.9% come next year, marking the largest increase since 1982. Beginning in January, more than 64 million eligible Americans will see their benefits increase by $92 to an average of $1,657 per month, to help offset the sharp increase in the cost of living.
The newly boosted monthly payments come at a time when inflation continues to increase rapidly each month, despite the Fed’s reassurance that price pressures are temporary and will abate soon. the latest CPI print stood at an annualized 5.4% in September, marking the largest 12-month increase since 2008, and the highest since 1991.
“While this increase will help current beneficiaries weather today’s inflation, we must remember that seniors’ long-term retirement security depends on lawmakers’ willingness to act now to shore up Social Security’s finances to avoid a potential across the board reduction in benefits if the trust funds become depleted,” Bipartisan Policy Center chief economist Jason Fichtner told Bloomberg.
Indeed, for at least 40% of the eligible beneficiaries, the Social Security benefits account for 90% of their income, and thus far, the annual increases have failed to keep up with the pace of accelerating costs of goods and services. To make matters worse, the trust fund from which Social Security payments are derived continues to be depleted, and will only be able to dispense about three-quarters of the earmarked payments if Congress fails to address long-term shortcomings in funding.
Information for this briefing was found via the Social Security Administration and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.