Social Security announces largest benefit increase in forty years

Judah Duke

The Social Security Administration announced an increase in benefits, allowing millions of senior citizens to receive the largest benefit increase in nearly four decades in light of the new cost of living.

After the Bureau of Labor Statistics’ consumer price index report for August showed a rise in inflation, the Social Security Administration announced a 8.7% rise for 2023 benefits on Oct 13.

Around 70 million citizens are eligible for social security benefits. The aid comes as discouraging drops in stocks and bonds, in addition to untamed inflation rates, have hit seniors in waves. The increase may assist those who hedged their savings in the tumultuous markets and those whose accounts dipped due to inflated gasoline and fuel prices.

The year-over-year rate of inflation is currently 8.2%, staggeringly higher than the Federal Reserve’s target of 2%. The increase is dubbed as what Mark Hamrick, a senior economic analyst at Bankrate, calls “a tremendously unwelcome negative surprise.”

There is another justification for some optimism in 2023. Officials announced that there will be no increase to Medicare premiums for seniors.

“Medicare premiums are going down and Social Security benefits are going up in 2023, which will give seniors more peace of mind and breathing room,”  Kilolo Kijakazi, the acting commissioner for the Social Security Administration, said in a statement. “This year’s substantial Social Security cost-of-living adjustment is the first time in over a decade that Medicare premiums are not rising and shows that we can provide more support to older Americans who count on the benefits they have earned.”

The U.S. President commented on the announcement, saying that “seniors are gonna get ahead of inflation next year.”

Retired citizens are more likely to rely on Medicare, according to a brief from the Department of Health and Human Services in 2021. It said that “more than one-half of adults develop serious disabilities after they reach age 65 and use some paid long-term services and supports.”

“Most Americans underestimate the risk of outliving their financial resources in retirement or experience economic hardship stemming from large, unanticipated health and long-term care costs in later life,” the report said.

Data from multiple government indexes show that retirees suffer from the negative effects of inflation more than the average American, not to mention that taxation on social security earnings is not commensurately indexed for inflation.

The increase will not be enough to relieve concerns for everyone, however. Many citizens voiced concerns on social media that the cost of living will outpace their benefits.

Anxiety over housing costs outshined others but showed up less in reporting.

“Even if your Medicare doesn’t go up, everything else has and will,”  user Kim Lyons-Dotson commented on the Social Security Administration’s post on Facebook. “Fuel, groceries and housing are ridiculously high. Especially for those on fixed incomes.”

Although experts noted some cooling in the housing markets, mortgages reached a 20-year high.

“This is great but you need to do more,” user Bryn Jones commented under Biden’s Facebook post. “A lot of seniors and disabled are being priced out of their homes. $140 ain’t going to cut it.”

There were also concerns over social security’s pay deductions.

“That’s great news for those of us that are on Social Security but it’s not such great news for our kids who are working hard and getting more and more money taken from their paychecks,” user Cheryl Nelson commented on the Social Security Administration’s Facebook post.

Young, working Americans doubt that the same security they’re paying for will cover them when they reach retirement, according to the AARP.