Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Social Security Raise Has Recipients Coming Out Ahead Of Inflation

Published 10/20/2021, 05:21 AM
Updated 07/09/2023, 06:31 AM

This article was originally published at the Humble Dollar.

Last week's news that Social Security recipients will receive a 5.9% cost-of-living adjustment for 2022 might seem like a nonevent. After all, those larger monthly checks will be fully devoured by today’s higher prices.

Or maybe not.

September’s report for the Consumer Price Index (CPI) showed that inflation for medical care services—a big cost for retirees—was quite tame over the past 12 months, rising less than 1%. Seniors also spend significantly less on transportation, so they’re less harmed by the past year’s 15% surge in the cost of new and used cars and trucks, as well as motor vehicle parts.

On the downside, younger retirees—or, at least, those willing to travel during the pandemic—have likely felt the brunt of the 18% jump in the cost of “lodging away from home.” One plus for travelers: A strong U.S. dollar has made overseas excursions less pricey. Those in their 60s usually travel more, while those ages 75 and up tend to spend a higher amount on health care.

Next year may be kinder to all consumers. According to Bank of America analysts, core CPI—which excludes volatile food and energy items—will rise 4.3% in 2021 and 3.1% in 2022. The Federal Reserve, which looks at a somewhat different inflation measure, expects core inflation to be even lower.

What does all this mean? Arguably, those receiving Social Security checks are getting a pretty good deal. They’re receiving a 5.9% raise, while their cost of living appears to be climbing at a slower rate.

Latest comments

This humble jump follows a turbulent year when our SS seniors received an anemic 1.2% increase for 2021. We have been paying higher prices all year. Doesn't begin to cover these additional expenses. If you think we're in as good place take a 5 minute walk in our shoes.
Im not sure you did your research…
Inflation rate / per QUARTER has been running above 5%. EVERY QUARTER! There are 4 quarters per year. So the inflation rate for the year equals 20+%. How does 5.9% Social Security raise FOR THE YEAR equal 20+%??? You financial guys are liars and crooks that tell everyone they are getting a good thing when you are actually taking three quarters for yourselves. We KNOW better.
Are you serious? Heating cost this winter? Food prices? Gas prices? Everything cost more? Take a walk around.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.