(TheConservativeTimes.org) – On paper, the planned increase of the Cost of Living Adjustment (COLA) granted by Social Security may look good, but financial industry observers and experts caution that it may not be as rosy a future as some make it out to be.
COLA is set to increase Social Security payouts by 3.2% in 2024, on account of rising costs brought about by inflation. However, some note that it is a modest increase at best, and is ultimately insufficient to keep up with the increase in “essential living costs such as utilities, healthcare and food,” Newsweek reported, citing Hannah Workman, who works on Atticus’ creative team.
The segment of society most affected by any movement in the COLA would be seniors, whose day-to-day expenses rely heavily on their Social Security checks.
Another expert, Christopher Hensley, who serves as a financial adviser and is president of Houston First Financial Group, told the news outlet that as opposed to measuring the consumer price index (CPI), it would be more prudent to use CPI-E (for the elderly) as the yardstick for what a more equitable COLA should look like. According to Hensley, expenses like healthcare account for more under the CPI-E, which for seniors, are costs that only increase as they get older.
The use of CPI instead of CPI-E results in a disconnect between “the real-life financial squeeze they’re (seniors and the elderly) feeling, especially with healthcare costs,” Hensley said.
The meager COLA is concerning, especially given the fact that poverty incidence among the elderly in America rose to 14.1% in 2022, compared to 10.7% in the previous year, according to data from the U.S. Census Bureau. On top of this, the Senior Citizens League says that more than 25% of 1,055 adults it surveyed during the first quarter of the year said that they have exhausted a retirement account over the last 12 months.
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