16 Things Seniors Born Between 1941-1969 Could Take Advantage Of
In response to the Social Security Administration’s announcement of a 1.3 percent cost-of-living adjustment (COLA) for 2021, two lawmakers have introduced emergency legislation calling to increase the amount of next year’s COLA.
If passed, the proposed bill (HR 8598) would provide a 3 percent cost-of-living adjustment for Social Security and Supplemental Security Income to recipients in 2021. The annual COLA also affects the annuities of federal retirees in the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS).
“Social Security is our country’s number one financial security program, and, because of the COVID-19 pandemic, people are depending on it now more than ever,” said House Ways and Means Social Security Subcommittee Chairman John B Larson (D-CT). “Seniors are seeing a rise in food, medical, housing costs and more, and a 1.3 percent cost of living adjustment (COLA) is just not enough during these difficult times.”
According to The Senior Citizens League, while COLAs averaged 3 percent between 1999 and 2009, over the past decade the annual COLAs have averaged just 1.4 percent.
Larson introduced the legislation along with Congressman Peter DeFazio (D-OR).
“This absolutely anemic COLA won’t even come close to helping them afford even their everyday expenses, let alone those exacerbated by COVID-19,” said DeFazio. “Raising the COLA to 3% for 2021 will provide seniors with an immediate, crucial lifeline during the ongoing coronavirus crisis. It’s also critically important that Congress provide a permanent fix to the COLA formula that actually reflects the real costs that seniors face.”
Currently, the Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.
For years, there have been calls from organizations such as NARFE and AARP that another CPI index be used to determine the COLA for Social Security recipients and federal annuitants, in particular, the use of the “CPI for the elderly” (CPI-E) in which healthcare costs are a major component.
“NARFE continues to support strong COLAs based on fair assessments of increases in consumer prices to protect the value of federal annuities from inflation,” NARFE recently wrote on their website. NARFE says it specifically supports the Fair COLA for Seniors Act which would switch to the CPI-E.
Larson — who also introduced the Social Security 2100 Act in 2019 — supports the CPI-E as the index to determine future COLAs.
While Larson said he is “pleased that the 65 million Americans who rely on Social Security will be receiving a 1.3 percent cost-of-living-adjustment (COLA) next year,” he also mentioned, “the reality is most seniors face cost increases each year even beyond what’s reflected in the COLA.”
“It’s time to fix that by enacting the Social Security 2100 Act, “said Larson. “My bill would strengthen benefits by basing the COLA on what seniors actually spend on items such as medical expenses, food, and housing. Under this new index…a retiree or widow would experience benefits that are 6% higher by the time they reach age 90.”