Results for: Social Security

A new proposal in Congress, the Boosting Benefits and Cola for Seniors Act, seeks to increase monthly Social Security benefits by adjusting the calculation method for the annual Cost-of-Living-Adjustment (COLA). The bill replaces the current Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) with the Consumer Price Index for all Americans aged 62 and over, which is believed to better account for inflation experienced by seniors, especially in healthcare costs. The proposed change has received support from various organizations representing seniors and labor unions. Companion legislation has also been introduced in the Senate, and recent projections indicate a potential increase in COLA in 2025.

A newly introduced bill in the U.S. House aims to increase Social Security benefits for seniors by adjusting the formula used to determine the yearly cost-of-living-adjustment (COLA). Rep. Ruben Gallego’s Boosting Benefits and COLAs for Seniors Act proposes using the Consumer Price Index for Americans aged 62 or older (CPI-E) to calculate COLA, which considers medical expenses more heavily than the current CPI-W index. This change could potentially lead to higher benefits for seniors, as healthcare costs often disproportionately impact their expenses. The bill also mandates the Bureau of Labor Statistics to calculate and publish the CPI-E monthly.

Elon Musk, CEO of Tesla and SpaceX, has sparked controversy by calling Social Security the “Biggest Ponzi scheme ever.” The government program provides retirement income and helps millions of Americans qualify for Medicare.

John Severson’s letter highlights the underestimated impact of inflation on consumers. The omission of shrinkflation, or package downsizing without price reduction, from the Consumer Price Index (CPI) results in an understated base for calculating future CPI increases. This error compounds over time, particularly affecting retirees reliant on Social Security or federal retirement checks tied to CPI adjustments.

Social Security has become a source of frustration for retirees due to accidental overpayments. Ellen, a Virginia resident, recently received a $914 overpayment notice despite her benefits being reduced to less than $850. The agency has overpaid billions of dollars, leading to legal disputes and demands for repayment. Some retirees have received over $4,000 in overpayment notices, leaving them financially distressed.

Social Security beneficiaries born between the 21st and 31st of any month will receive their monthly payments on Wednesday. Retirees, individuals with disabilities, and survivors of deceased claimants are eligible for benefits. The maximum payment amount is $4,873, but most will receive less. SSI recipients, which includes individuals with disability and retirees with low income, typically receive lower payments.