Soaring inflation could lead to a Social Security cost-of-living adjustment of up to 6.2% in 2020, the highest in nearly 40 years, according to an estimate Wednesday by The Senior Citizens League.
The Labor Department’s latest report on the consumer price index for July, also released Wednesday, said the core inflation measure used by the Federal Reserve — the consumer price index, minus food and energy — increased by 0.3% in July, continuing a series of increases this year.
The overall consumer price index increased by a half-percent during July, slightly higher than most experts were predicting.
“The estimate is significant because the COLA is based on the average of the July, August and September CPI data,” Mary Johnson, a Social Security policy analyst for The Senior Citizens League, said in a statement. “With one-third of the data needed to calculate the COLA already in, it increasingly appears that the COLA for 2022 will be the highest paid since 1983 when it was 7.4%.”
Social Security benefits increased by 1.3%, or an average of about $20 a month, in 2021, but 86% of recipients said their expenses increased by much more than that, according to the organization.
In a poll of more than 500 members, the league found 34% of seniors had to dip into their emergency savings during the coronavirus pandemic. The survey said 20% were forced to make changes in the saving investments, while 19% drew down their retirement savings more than usual and visited a food pantry or applied for welfare benefits.
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