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Throughout this dreaded pandemic, there has been one group of citizens who have been hit pretty hard across-the-board.
These are senior citizens who rely on Social Security.
Many senior citizens are eagerly awaiting news of more stimulus checks or other types of aid that they are in desperate need of and it is possible that a little bit more could be coming next year.
I’ll explain below.
The Social Security Administration announced this week that the cost-of-living adjustment for benefits in 2021 will be 1.3%.
This was the second lowest increase in the program’s history with the lowest increase happening in 2017 (2010, 2011, and 2016 did not see an adjustment at all).
For the average retirement benefit, this new increase would amount to a $20 increase per month.
But given the situation that we find ourselves in due to coronavirus, many people do not believe that this is sufficient.
As a result, two Congressional Democrats — Reps. Peter DeFazio, D-Ore., and John Larson, D-Conn. — want to propose a bill to raise that adjustment to a 3% emergency increase next year.
“Due to the Covid-19 pandemic, seniors are facing additional financial burdens in order to stay safe,” DeFazio said in a statement.
“This absolutely anemic COLA won’t even come close to helping them afford even their everyday expenses, let alone those exacerbated by Covid-19.”
The new bill which is titled, Emergency Social Security COLA for 2021 Act, was scheduled to be introduced today.
From 1999 to 2009, the annual increases averaged 3%, according to research from The Senior Citizens League, a nonpartisan advocacy group for older Americans.
“Raising the COLA to 3% for 2021 will provide seniors with an immediate, crucial lifeline during the ongoing coronavirus crisis,” DeFazio said.
“It’s also critically important that Congress provide a permanent fix to the COLA formula that actually reflects the real costs that seniors face.”
Reportedly, the Social Security administration uses the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W to arrive at cost-of-living adjustments.
But that program is problematic because it focuses on the cost of workers is 62 and younger and does not take into account the rising costs that retirees face, especially with respect to healthcare.
This new cost-of-living adjustment was endorsed by several advocacy groups that work on behalf of seniors such as The Senior Citizens League, the National Committee to Preserve Social Security and Medicare and Social Security Works.
“Social Security’s automatic cost-of-living adjustment is one of its most valuable features, even more so in the middle of a pandemic,” Social Security Works president Nancy Altman said.
“But due to an inadequate measure, Social Security’s modest benefits are eroding.
“Congress should immediately pass their legislation, which will boost the economy and save lives.”
I haven’t heard a lot about this cost of living adjustment working its way into a stimulus package but it is possible that it could be passed as a standalone bill.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.