For the first time in a generation, millions of older people face shrinking Social Security checks next year says the Star Tribune. According to the trustees who oversee Social Security, they’re projecting that there won’t be a cost-of-living adjustment (COLA) for the next two years. That hasn’t happened since automatic increases were adopted in 1975.
While the Social Security benefits wouldn’t go down, monthly checks would dip for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
“I will promise you, they count on that COLA,” said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. “To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal.”
According to the article, cost-of-living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.
Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have been hit with declining home values and shrinking stock portfolios.