Last year, the Social Security Administration announced that its annual cost-of-living adjustment (COLA) to benefits for Social Security recipients was 5.9 percent, the largest increase since the early 1980s. The increase, which has been in the low single digits in recent years, came about because of rising inflation throughout 2021. 

According to a new report, continued inflation has “all but wiped out” the benefits that have come from the raise. 

Financial Advisor Magazine this week cited data from the Senior Citizens’ League showing that rising expenses have continued to plague a majority of seniors, despite the larger Social Security benefits. “Some people are just getting into some real bad situations,” Mary Johnson, a policy analyst for the Senior Citizens’ League, told the publication. “The problem is when living on fixed income, it’s not like you can go out and get a part-time job, because many seniors often retired because of health problems or other issues.”

The League found that 73 percent of seniors saw household expenses rise by $96 per month in 2021, while the COLA increase has only given a $92 monthly benefits increase. 

And surging inflation this year has made matters worse, the League said.

“The December consumer price index data indicates that the Consumer Price Index for urban wage earners and clerical workers (CPI-W), which is used to calculate the Social Security COLA, was 7.8% through December 2021. That’s 1.9 percentage point[s] higher than the 5.9% COLA that beneficiaries actually received in January,” Johnson told Financial Adviser. She added that the number was 8.6 percent year-over-year in February, also a record. 

With inflation continuing to rise this year, including the historic surges in the price of gas, the COLA adjustment is expected to get another big boost next year. Earlier this month, the Senior Citizens League predicted that the COLA next year will reach as high as a  7.6 percent increase. The actual number won’t be announced until this fall. 

That announcement came after the Bureau of Labor Statistics announced a 0.8 percent increase in the Consumer Price Index for All Urban Consumers. 

“Increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all items increase,” the Bureau of Labor Statistics said in their announcement. “The gasoline index rose 6.6 percent in February and accounted for almost a third of the all items monthly increase; other energy component indexes were mixed. The food index rose 1.0 percent as the food at home index rose 1.4 percent; both were the largest monthly increases since April 2020.”

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters.