The first cost-of-living adjustment (COLA) on Social Security checks in two years was announced this week, reports The Washington Post.
For lower- and middle-class seniors, Social Security represents a staggering share of their income. For these older residents, medical bills, taxes, insurance, utilities, and groceries consume nearly all their income.
Higher medical costs are a huge factor in this dwindling income. Some older citizens spend thousands per year on medical costs and hundreds per month on prescriptions. As a matter of fact, as much as one-fourth of the raises to Social Security beneficiaries could be wiped out by higher Medicare premiums.
The Washington Post reports that among the bottom fifth of people 65 and older, Social Security represents 80 percent of income. For the middle tier, it makes up 65 percent. Among the top tier, it comprises less than 20 percent of their income.
Starting in January, 55 million Social Security recipients will get an increase of about $39 a month. In December, more than 8 million who receive Supplemental Security Income, the disability program for the poor, will get an increase of about $18 a month.
COLA is tied to an inflation measure released this past week. Because inflation was so low, the measure produced no raises in 2010 or 2011. Those were the first two years without a COLA raise since automatic increases were enacted in 1975.
Do you think 3.6 percent is a sufficient COLA?
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