Social Security Checks Will Grow In 2019 As Inflation Rises
After a stretch of low inflation, the cost-of-living adjustment, or COLA, for 2019 is the highest in seven years. It amounts to
The COLA affects household budgets for about one in five Americans, including
Unlike most private pensions,
Nonetheless, many retirees and their advocates say the annual adjustment is too meager and doesn't reflect higher health care costs for older people. Federal budget hawks take the opposite view, arguing that increases should be smaller to reflect consumers' penny-pinching responses when costs go up.
With the COLA, the estimated average monthly
"For more recent retirees, the 2019 COLA will be the largest increase they have gotten to date," said policy analyst
But retiree
Her Medigap insurance for costs not covered by Medicare is going up, and so is her prescription drug plan. She expects her Medicare Part B premium for outpatient care also will go up.
"It isn't enough of an increase that it takes care of all of the increases from health care, plus rent our rent gets increased every year," said Deakin, 70, who worked in the finance department at a boat dealership.
Health care costs eat up about one-third of her income, she estimated.
"I appreciate the COLA adjustment, and in no way am I complaining," Deakin added. "It's just that every single thing you can talk about goes up. It doesn't go down."
By law, the COLA is based on a broad index of consumer prices. Advocates for seniors claim the general index doesn't accurately capture the rising prices they face, especially for health care and housing. They want the government to switch to an index that reflects the spending patterns of older people.
"What the COLA should be based on is still a very real issue," said
The COLA is now based on the Consumer Price Index for
Advocates for the elderly would prefer the CPI-E, an experimental measure from the government that reflects costs for households headed by a person age 62 or older. It usually outpaces general inflation, though not always.
COLAs can be small or zero, as was the case in several recent years. People often blame the president when that happens. However, the
President
"The revenue loss in the tax bill contributes to much higher deficits and debt, and that is where the threats begin to come in," said
Former President
Because of compounding, smaller COLAs would have a dramatic effect over time on the federal budget and
Beyond federal budget woes,
About 177 million workers pay
In addition to retirees, other
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