Big social security bump could aid California seniors left out of state’s inflation relief
More than 65 million Social Security beneficiaries will see an 8.7% cost of living increase starting January, but the increase comes at a time many California seniors were left out of the state’s new inflation relief plan.
The biggest increase in 42 years will boost the average retired worker’s monthly benefit from $1,681, to $1,827. An aged couple who both get benefits would see their monthly amounts go from $2,734 to $2,972.
The benefits will increase on average more than $140 per month.
As a further boost, premiums and deductibles will go down next year for Medicare Part B, which covers doctor bills, outpatient hospital services, certain home health services and other items. The premiums are often deducted from Social Security payments.
Standard monthly premium will be $164.90 next year, down $5.20 from this year. Annual deductible for all Medicare Part B beneficiaries will be $226 in 2023, down $7 from this year.
Still, there was a sense Thursday that more could be done to help seniors cope with the worst inflation in 40 years.
“This may be the first and possibly the last time that beneficiaries today receive a cost of living adjustment (COLA) this high,” a briefing from the nonpartisan Senior Citizens League stated.
But, it added,”It is too early to say how well the 8.7% COLA will keep pace with inflation in 2023.” The 2022 increase “has fallen short on average by 50%,” the League said.
Frustrations from California seniors have mounted as the state Middle Class Tax refund, a one-time payment of up to $1,050, left many out. The Bee receives several emails a week from residents living on fixed incomes, angry and disappointed that they don’t qualify for refund payments.
“Everything is going up,” said Eureka resident Caren Spencer, 76, in a July interview with The Bee.
Spencer, who doesn’t meet the minimum required to file taxes and was thus rejected from the refund payment, which began rolling out in early October, earns $26,000 a year solely on Social Security income.
“My rent went up,” she said “of course gas, utilities are particularly stressful and then of course groceries.”
Some activists have long complained that the cost of living data used to determine the Social Security increase is flawed. Changes are based on price fluctuations from third quarter to third quarter — July, August and September.
But the system “underestimates the inflation that Social Security beneficiaries experience since it does not give enough weight to expenses like health care or housing costs,” the League said.
There are efforts in Congress to adjust the system to more precisely meet seniors’ needs. House Social Security subcommittee chairman John Larson, D-Conn., said Thursday he’ll push “ a new measure of inflation that takes into account actual expenses incurred by seniors.”
There’s also criticism that the increase is too little too late. The UCLA Anderson forecast found that the cost of living in California was up 11.2% in the April-May-June quarter this year, as the price of gasoline and food soared. Social Security recipients, though, got a 5.9% increase in their benefits this year.
The more optimistic note is that few experts see prices rising as much as 8.7% next year.
The Federal Reserve Board is determined to get inflation down. Its chief weapon is interest rates, which tend to stifle demand and thus give sellers incentive to keep prices down. The Fed has raised its key rate five times this year, and is expected to implement another increase when it meets again in early November.
Those moves, as well as stabilizing and even falling energy prices, should slow price increases, UCLA predicts. In just the past week, the average price of a gallon of regular gasoline in California fell about 22 cents to $6.20, according to AAA.
UCLA sees the rate of inflation easing to 3.9% this quarter and 4.4% next year.
The latest increase “will provide much needed relief to millions of Americans,” said AARP Chief Executive Officer Jo Ann Jenkins.
This story was originally published October 13, 2022 at 11:06 AM with the headline "Big social security bump could aid California seniors left out of state’s inflation relief."
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