The Insidious Effect of Inflation on COLA
Some pundits have long lamented that Social Security’s Cost of Living Adjustment (COLA) simply doesn’t keep up with the actual rising cost of living, especially as relates to healthcare expenses. Case in point: the 2021 COLA increase was 1.3% compared with about a 5% increase in healthcare costs. Many of those same pundits now express joy with early predictions are that the 2022 COLA increase could be as much as 6%. And while that’s surely good news for SS recipients, it’s doubtful that increase will keep up with sky-rocketing inflation. It’s a classic case of “which came first, the chicken or the egg.” The 2021 COLA increase will be bigger because of high inflation this year, but continued inflation next year will more than offset the COLA increase. Inflation has a very insidious effect on everyone’s Social Security income, as explained in this CBS News article by contributor Caslee Sims. Click here to read more.
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