Inflation has been on the minds of many Americans in recent weeks as prices for consumer goods increase. It could also result in a historic boost to Social Security benefits.
According to a recent analysis from the Committee for a Responsible Federal Budget cited by CBS News, Social Security benefits might increase by 10.8% due to a cost-of-living (COLA) adjustment early next year. This would impact millions of seniors living in the U.S.
This estimate – which the non-partisan committee indicates could occur if inflation continues to rise – is greater than the 8% Social Security estimate. An increase of 8% would still be the biggest increase in decades. In 1980, there was a 14.3% COLA increase, followed by an 11.2% increase in 1981.
Since the average monthly Social Security check is about $1,658, a 10.8% increase would boost it to $1,837.
Additionally, the committee offered a 7.3% increase estimate that could happen if inflation begins to decrease this year.
Data from May released by the Bureau of Labor Statistics showed the Consumer Price Index increased by 8.6% over the previous 12-month period. This represented a 40 year high in inflation, Bloomberg reported. After rising 0.3% in April, the CPI increased by 1% in May.
Experts expect inflation to persist through the end of this year, particularly for food, gas, and housing, said CBS News. Pandemic-related supply and labor issues and the Russian invasion of Ukraine have contributed to inflation in the U.S.
In an effort to slow down this inflation, the Federal Reserve Bank has been raising interest rates, which makes it more expensive to borrow money.
Already, Social Security and Supplemental Security Income (SSI) benefits will increase by 5.9% for approximately 70 million Americans this year, according to the Social Security Administration. Even though this is a considerable increase, it hasn’t yet helped seniors maintain buying power as inflation continues to rise.
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