Retirees feeling the impact as Social Security checks fell short last year: report
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America’s senior citizens and the retirement community may feel additional financial strain in recent months after there was a big shortfall in their Social Security payments last year.
According to the nonpartisan League of Senior Citizens, there was a sharp increase in the cost of living in 2022 and inflation-adjusted payments to Social Security recipients decreased in the same year. This resulted in a 46% gap in the monthly benefit checks received by 70 million Americans.
The organization reported that Social Security recipients received a 5.9% cost of living adjustment (COLA) last January, which saw the average benefit check increase $92.30, from $1,564 in 2021 to $1,656.30 for 2022.
However, the league reported that the 5.9% inflation adjustment was an average of 46% less than the actual monthly inflation figure.
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FILE – Blank Social Security checks run through a printer at the U.S. Treasury printing office on February 11, 2005 in Philadelphia, Pennsylvania. (William Thomas Cain/Getty Images/Getty Images)
According to their report, this calculated discrepancy resulted in the average Social Security benefit check falling by more than $42 per month and more than $508 by 2022.
“As Social Security recipients expect an 8.7% increase in Social Security benefits in January, inflation in 2022 has impacted retiree budgets,” the league said in a statement. “Many retirees have been forced to spend through savings much faster than planned, and those without savings have turned to food pantries and low-income assistance programs in greater numbers.”
The inflation-adjusted rate is calculated using 2021 figures, as measured by the Consumer Price Index.
The annual inflation rate for 2021 was 7%, but the adjustment for Social Security benefits was calculated based only on the change in the third quarter reports of the Consumer Price Index for Urban Earners and Clerical Workers (CPI-W).
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The third quarter runs from July 1 to September 30.
In the third quarter of 2021, the CPI-W increased by 5.9%. That rate jumped at the end of the fourth quarter to 7.4%, leaving seniors short even before the start of 2022.
Moving forward to 2023, these rates have been adjusted again.
FILE – In this photo illustration, a Social Security card sits next to checks from the U.S. Treasury on October 14, 2021 in Washington, DC (Kevin Dietsch/Getty Images / Getty Images)
As of January 2023, Social Security benefits have increased by 8.7% or about $140, raising the average check to nearly $1,800.
This increase was again calculated through third quarter inflation rates: inflation was 7.1% in November, down from its shocking 9.8% in June.
Federal agencies predict that 2022 will end with an annual inflation rate between 7% and 8.01%.
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An elderly couple walks down a street in Alhambra, California on February 4, 2020. (FREDERIC J. BROWN/AFP via Getty Images / Getty Images)
As senior citizens look forward to the increase in Social Security payments in 2023, many are still struggling with the 2022 gap between their inflation and their Social Security payments.
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The Senior Citizens League reported that 33% of seniors applied for food stamps or visited a food pantry this year, compared to 22% last year, and that 17% applied for help with heating costs, compared to 10% last year. , according to a recent study.
The Associated Press contributed to this report.