Could Social Security Recipients Get Another Stimulus Check? | Smart change: personal finance
In March, many people received a stimulus check of $ 1,400 thanks to the US bailout. But at this point, the likelihood of there being a fourth short-term stimulus check is low. That’s because the economy has improved dramatically over the past six months, and right now it’s harder to argue for widespread aid.
But some advocates insist that while the general public may not need another stimulus, elderly people on social security should be an exception. In fact, the non-partisan Senior Citizens League is calling on lawmakers to send Social Security recipients another set of checks for $ 1,400.
Seniors need help to maintain their purchasing power
At this time, we don’t know how much of an increase seniors will receive (called the cost of living adjustment, or COLA) in 2022. The reason is that annual COLAs are calculated based on data from the third. quarter of the Consumer Price Index for urban and office workers (CPI-W).
Currently we only have CPI-W data for July and August. And until the September number arrives, that COLA cannot be determined.
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But seniors are expected to receive official word on their COLA 2020 shortly. And no matter how it turns out, it looks like Social Security recipients will get their biggest raise in decades.
In fact, based on the data we already have from the CPI-W, experts predict that next year’s COLA will reach at least 6%. On the other hand, from 2021, seniors only saw their benefits increase by 1.3%.
But despite the generous COLA slated for 2022, the Senior Citizens League insists that Social Security recipients need help to maintain their purchasing power. For years, Social Security COLAs have done a poor job of keeping up with inflation. And even if a giant increase comes next year, the reason behind it will boil down to extreme increases in the cost of consumer goods that have impacted seniors and workers.
Or, to put it another way, even if the elderly get a big raise for 2022, they’re unlikely to end up doing it financially in the end, as the overall cost of living has gone up so much. And so giving Social Security recipients their own stimulus check might actually mean allowing their purchasing power to increase.
Will legislators find their way there?
It remains to be seen whether lawmakers accept a stimulus control specific to seniors. But it’s clear that seniors who get most of their income from Social Security have struggled for years, and this could continue even if the 2022 increase is as generous as experts think.
Recall that Medicare Part B premium increases will also be the wildcard that seniors will have to contend with in conjunction with this increase. If Part B costs increase enough, that alone will erode any benefits that older people might get from higher Social Security paychecks.
Will the COLA calculation process change?
The viability of a short-term senior-specific stimulus check can be questionable. However, a change that could taking down the pike is a change in the way COLAs are calculated.
For years, seasoned lawyers have called on lawmakers to use the Consumer Price Index for Seniors (CPI-E) as the basis for calculating COLAs. The logic is that this index more accurately represents the costs that the elderly face.
Swapping the IPC-W for the IPC-E could lead to higher COLAs across the board, which in turn could give older people more purchasing power. And while it doesn’t sound the same ringtone as a fourth raise check, it could still be a lifeline.
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