According to The Senior Citizens League, the sleight of hand behind it is a formula for calculating the Cost of Living Adjustment (COLA) that has robbed seniors of 33% of their buying power since 2010.
Since then, annual COLA increases have averaged a meager 1.375%. That means the average recipient has received a COLA increase of less than $20 a month. For many, the con job is even more vexing because much of that gain is taken back with increases in Medicare premiums.
These annual COLA adjustments are based by the U.S. Bureau of Labor Statistics (BLS) on a formula that uses the Consumer Price Index for All Urban Wage Earners and Clerical Workers — a lengthy descriptor that’s usually abbreviated as CPI-W. Therein lies the problem — this index does not accurately reflect the rising costs that most affect seniors — such as medical care and drugs, food/staples and rent. Even the most modest estimates suggest these costs are increasing at a rate of somewhere between 5% and 10% annually.
Author(s): Dave G. Houser
Publication Date: 5 March 2021
Publication Site: Multibriefs