America’s seniors and retirement community may feel additional financial pressures in recent months as there was a significant shortfall in their Social Security payments last year.
According to the nonpartisan Senior Citizens Association, there was a sharp increase in the cost of living in 2022, and inflation-adjusted payments to Social Security recipients fell that same year. This resulted in a 46% gap in the monthly benefit checks received by 70 million Americans.
The organization reports that Social Security recipients received a cost-of-living (COLA) adjustment of 5.9% last January, which saw the average benefit check increase by $92.30, from $1,564 in 2021 to $1,656.30 for 2022.
However, the association reported that an inflation adjustment of 5.9% fell short of the actual inflation figure each month by 46% on average.
This calculated discrepancy caused the average Social Security check to fall by more than $42 per month and more than $508 for 2022, according to their report.
“While Social Security recipients look forward to an 8.7% increase in Social Security benefits in January, inflation in 2022 weighed on retiree budgets,” the association said in a statement. “Many retirees have been forced to spend through savings much more quickly than planned, and those without savings have turned to pantries and low-income assistance programs in greater numbers.”
The inflation-adjusted rate was calculated using the 2021 figures, according to the Consumer Price Index.
The annual inflation rate for 2021 was 7%, but an adjustment for Social Security benefits is calculated based on the change in the third-quarter reporting Consumer Price Index for urban wage earners and clerical workers (CPI-W).
The third quarter runs from July 1 through September 30.
In the third quarter of 2021, the Consumer Price Index (CPI-W) increased by 5.9%. That rate jumped by the end of the fourth quarter to 7.4%, keeping seniors short even before the start of 2022.
Going forward into 2023, these prices have been revised again.
As of January 2023, Social Security benefits have increased by 8.7% or about $140, increasing the average check to nearly $1,800.
This increase was accounted for again by inflation rates for the third quarter: inflation reached 7.1% by November, down from a staggering 9.8% in June.
Federal agencies expect 2022 to end with an annual inflation rate of between 7% and 8.01%.
While seniors look to increase their Social Security payments in 2023, many still struggle with the 2022 shortfall between inflation and Social Security payments.
The Senior Citizens Association reported that 33% of seniors applied for food stamps or visited a food pantry this year, compared to 22% last year, and 17% applied for help with heating costs, compared to 10% last year, according to A recent study.
The Associated Press contributed to this report.