Two months into the New Year, seniors, veterans, and other retirees still haven’t received any cost-of-living adjustment (COLA) for 2016. For the third time in only 7 years, more than 70 million people are going without any annual benefit boost. From 1975 until 2010 Social Security recipients received COLAs every year. Congress still has time to take action, and some Members of Congress are saying that too many lawmakers have turned a blind eye to the problems facing retired Americans.
Since 2009, COLAs have been at record lows, averaging just 1.2% — about one - third the more typical 3% that COLAs averaged in the prior decade. Those low COLAs are having a big long-term impact on the retirement income of people who have been retired for seven years or more.
According to a TSCL analysis, over the last seven years, average Social Security benefits are about $153 a month lower in 2016 than if inflation had been the more normal levels of about 3%. That has cost individuals with an average benefit of about $1,169 in 2016 about $5,364 in total lifetime benefits just in the past seven years — an amount that will grow over time.
According to statistical data from the Social Security Administration, TSCL estimates about 88 percent of Social Security beneficiaries have received benefits during the 2009 – 2015 period and have been impacted the hardest. “With almost two-thirds of older Americans depending on Social Security for over half of their income, going without a COLA is a loss of income that most beneficiaries simply can’t afford,” says TSCL Executive Director, Shannon Benton. “Spiking medical costs are causing retirees to go into debt, and run through their savings more quickly than planned,” she adds.
New legislation in both the House and the Senate would provide an emergency cost-of-living adjustment (COLA) of about $581. The legislation would fully pay for itself by closing a tax loophole enjoyed by the nation’s top CEOs — whose average salary in 2014 topped $16 million each. The Seniors and Veterans Emergency Benefits Act (SAVE Benefits Act) would provide an emergency payment equal to 3.9% of the average annual Social Security benefit — the same percentage raise that CEOs at the top 350 firms received in 2014. Closing the loophole would also provide a new stream of revenue to Social Security, thereby improving program solvency.
TSCL strongly supports the legislation, which was introduced with the support of more than 20 Senators. There is still time to pass the SAVE Benefits Act. Help the effort to pass an emergency COLA, sign TSCL’s petition and tell your Members of Congress how no COLA is impacting you!