Social Security’s Future: COLA Increases, Benefit Cuts and the Push for Reform

Mark, your organization estimates the adjustment will increase average annual benefits by about $900.

The highest benefit recipients could receive more than $2,200 in additional benefits.

For those who are unfamiliar with how this works, why is there such a significant difference between what beneficiaries receive?

Right.

So the way that Social Security works is the more you earn during your lifetime, the more you receive in your benefits.

And the more you receive in benefits, the more you get in cost of living adjustment.

The standard Medicare Part B premiums projected to rise by $6.60 per month to $209.50 next year.

How much of that COLA increase will retirees actually get to keep after accounting for Medicare premiums and other rising expenses?

Well, the idea of the COLA is it's supposed to adjust for inflation.

In fact, it actually over-adjusts for inflation a little bit.

And so...

Seniors' costs are going to go up.

The idea of the COLA isn't to make you richer.

It's to make you keep up.

As for the Medicare premium, it's actually a pretty modest increase relative to that COLA, right? So the average COLA is $900 a year.

The average Medicare premium is less than $100 a year increase for Part B.

So people are going to be keeping most of that COLA.

But then, of course, they'll use it for other expenses, whether it's for housing or whether it's for groceries or whatever else their needs are.

Mark, your organization estimates the adjustment will increase average annual benefits by about $900.

The highest benefit recipients could receive more than $2,200 in additional benefits.

For those who are unfamiliar with how this works, why is there such a significant difference between what beneficiaries receive?

Right.

So the way that Social Security works is the more you earn during your lifetime, the more you receive in your benefits.

And the more you receive in benefits, the more you get in cost of living adjustment.

The standard Medicare Part B premiums projected to rise by $6.60 per month to $209.50 next year.

How much of that COLA increase will retirees actually get to keep after accounting for Medicare premiums and other rising expenses?

Well, the idea of the COLA is it's supposed to adjust for inflation.

In fact, it actually over-adjusts for inflation a little bit.

And so...

Seniors' costs are going to go up.

The idea of the COLA isn't to make you richer.

It's to make you keep up.

As for the Medicare premium, it's actually a pretty modest increase relative to that COLA, right? So the average COLA is $900 a year.

The average Medicare premium is less than $100 a year increase for Part B.

So people are going to be keeping most of that COLA.

But then, of course, they'll use it for other expenses, whether it's for housing or whether it's for groceries or whatever else their needs are.