Triggered by a surge in inflation in the cost of food and gas, the United States Department of Labor announced Wednesday that from January it will increase Social Security’s cost-of-living adjusted payments (COLA) by 5.9 percent. It was the biggest increase in decades.
The Department of Labor, also announced that inflation jumped 5.4 percent in September compared to a year ago.
In the past, COLA was around 2 percent. In 2021, the adjustment will be 1.3 percent.
“For nearly everyone who is retired today and is still alive and receiving Social Security, this will probably be the highest COLA they have ever received,” said Mary Johnson, Social Security policy analyst at the League of Senior Citizens in an interview with MarketWatch.
“We are talking about inflation rates that almost all social security recipients never experience,” he said.
He said there were signs inflation would continue to pick up at least into next year, adding he had heard from hundreds of seniors who were having trouble buying food.
About 64 million Americans, mostly senior retirees, receive Social Security payments.
Today’s announcement of a 5.9 percent increase in COLA, the largest increase in four decades, is critical for Social Security recipients and their families as they try to adjust to rising costs,” said Jo Ann Jenkins, CEO of AARP, an interest group focused on in those over the age of 50, in a statement.
The amount of Social Security benefits is calculated using the Consumer Price Index of Urban Wage Recipients and Administrative Workers. [my/jm]