Social Security Makes HUGE Changes For 2022 — Did You See These?
(DailyDig.com) – In 2021, the cost of living skyrocketed by a whopping 7%, breaking records to become the most significant increase in decades. This situation forced the government to recalculate the amount of money issued to Social Security recipients each month. Checks are set to expand by an average of 5.9%, prompting controversy.
The Social Security Administration uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate payments. Lawmakers disagree on whether this measurement strategy serves the highly-specific needs of seniors.
President Biden and many others seek to change the SSA measurement to provide a COLA specific to individuals over the age of 62, called the Consumer Price Index for the Elderly (CPI-E). Some worry this shift will do more harm than good.
Social Security’s cost of living adjustments spark debate about the appropriate measurement used https://t.co/hzWZ6EiqPW
— CNBC (@CNBC) January 12, 2022
The Center for Retirement Research (CRR) at Boston College claims that switching seniors to the CPI-E will not guarantee the beneficiaries will see an increase. They indicated that if the SSA used the CPI-E last year, the COLA would’ve been less than the 5.9% allotted by the administration.
CRR believes a totally different model would better facilitate cost-of-living increases for Social Security beneficiaries. It feels the CPI-E just remeasures data collected from the population in its entirety, which doesn’t necessarily translate out well to specific subsets of people.
CRR Director Alicia Munnell asserted that it was best to have a separate model for seniors and other beneficiaries as their spending habits are different from the rest of Americans. While she agrees that the government should follow a different model, she’s unsure if it’s truly a top priority issue at the current point in time.
Munnell believes the SSA needs first to address other more serious issues, such as the risk of partial insolvency by as early as 2034. Cost-of-living increases won’t matter much if the program can only afford to pay 78% of its beneficiaries.
Is the government trying to short Social Security benefits at a time in which many are already struggling more than they have in decades? What do you think? Reply to your email and let us know. We’d love to hear from you!
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