The over 70 million Americans who get Social Security got great news. The Social Security Administration, founded by Franklin Roosevelt, will increase Social Security and Supplemental Security Income (SSI) benefits by 8.7%. That is the largest increase in decades, lifting the average payment by $140 a month. Unfortunately, for most recipients, that money is already spent because of raging inflation rates, which are likely to worsen.
Acting Commissioner Kilolo Kijakazi made a comment that is not worth much to most people who get Social Security payments: “Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room.”
The cost of medical care has risen in the United States for 30 years. There may have been very few years when this did not happen. However, the cost of care for people over 65, in general, is getting more expensive.
The bigger trouble than medical costs for many people is that inflation has driven up food and fuel costs. The prices of some foods are up by well into the double digits. While gasoline prices have fallen since they peaked at over $5 per gallon of regular in June, they remain high compared to prices over the past decade. Car prices have jumped by a rate higher than overall inflation as well.
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One caution that the Social Security Administration makes every year is that it will run out of money. Currently, the estimate is that this will happen in 2032 or 2033. While this may be a reason to keep increases modest, in contrast to the inflation rate, it does not mitigate the problem. America’s older citizens receive Social Security payments that, by themselves, do not keep many above the poverty level.
Is an increase in annual payments of over 8% for next year better than no increase? The answer is yes. However, it is also not enough.
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