This year’s adjustment in the cost of Social Security (COLA) is not enough to increase the purchasing power of seniors. According to data from the Senior Citizens League (TSCL), high inflation has caused Social Security benefits to lose 40% of their purchasing power since 2000.
In January, retirees saw a 5.9% increase in benefits, the largest in four decades. However, this increase doesn’t help retirees as much as one might think when costs rise. For the year through March 2022, TSCL found that beneficiaries experienced a 10 percentage point decline in their purchasing power.
The study compared COLA adjustments to Social Security to price increases for 37 goods and services commonly used by retirees. Mary Johnson, a policy analyst with TSCL Social Security, said benefits were most affected by increases in heating energy bills, gasoline and higher food prices, as well as a 14.5% increase in Medicare Part B premiums in January.
The Labor Department said consumer prices were up 8.5% in the year through April, according to Money, but the Social Security rate was even higher: 8.9% in April and 9.4% in March. Johnson estimates the 2023 COLA will hover around 8.6%.
Social Security benefits have increased 64% since 2000, Money reports. Johnson found that spending on typical seniors increased 130% during the same period. That means monthly Social Security benefits would have to be $540 higher than they are today to maintain the same purchasing power as in 2000.
“Retirees know very well that Social Security benefits don’t buy as much today as they did when they started retiring,” Johnson said. “To put it in context, for $100 of goods or services retirees bought in 2000, they could buy as little as $60 today.”
Maximum retirement pension in the USA
Before we talk about the average amount of pensions, let’s talk about the maximum retirement pension you can receive for a US retirement pension. This amount, of course, largely depends on what condition you are in for this pension and the age at which you request it.
Amount in dollars by age
- Age 62: 2364
- Age 65: 2993
- 66 years: 3240
- 67 years: 3568
- Age 70: 4194
As you can see in the table below, the amount received varies greatly depending on the age at which it is required, the maximum amount is $ 4,194 if your retirement is delayed until age 70. On the other hand, the minimum amount is $ 2,364 if retirement is required at age 62.
What is Social Security
Social Security is intended for people over the age of 65, but today the field is much larger. One in five people in the United States receives this type of benefit. Of these people, one in three are disabled, dependent or survivors. The rest, i.e., 2/3 are retirees between the ages of 62 and 70.
Thanks to these social security benefits, people who are unable to work are entitled to a financial pension. With this pension they can live well and without problems. Applying for a social security card is very easy and can be done through an online form or at any government office.