While Social Security and Supplemental Income Security beneficiaries are set to see the biggest bump in their monthly paychecks since 2012, some groups are warning it is not enough to cover growing expenses.
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The Social Security Administration announced a 2.8 percent cost-of-living adjustment for the coming year, which will boost the average beneficiary’s check by $39 per month. Still, other costs might be rising faster, retiree advocates caution.
“The cost of living increase may not adequately cover their expenses that rise faster than inflation including health, prescription drug, utility and housing costs,” AARP Chief Executive Officer Jo Ann Jenkins said in a statement on Thursday.
According to a study from the group, the rising costs of prescription drug prices outpaced inflation – on which the cost-of-living adjustment is based – substantially in 2017. While inflation rose 2.1 percent, the cost of commonly used brand name drugs jumped by an average of 8.4 percent – compounding a trend that has permeated for years.
Meanwhile, the Alliance for Retired Americans referred to the benefit increase as “small” in a statement on Thursday.
"Millions of seniors, surviving spouses and people with disabilities really need this cost-of-living adjustment (COLA),” Richard Fiesta, executive director of the Alliance for Retired Americans, said. “However, this COLA is not enough to keep up with the cost of health care and especially prescription drugs, which are far exceeding the rate of inflation. That is why we need to strengthen and expand Social Security with COLAs that reflect the real expenses seniors face.”
The cost-of-living adjustment in 2018 was 2 percent, or $26 per month on average, but was largely perceived to be offset by increases in Medicare costs. Medicare Part B premiums are projected to increase by about $1.50 to $135.50 per month in 2019.
The 2018 Social Security benefits increase followed a 0.3 percent rise in 2017 and no increase in 2016.
More than 66 million Americans collected monthly Social Security and Supplemental Security Income benefits this year.