The Group Security Office in Alhambra, California.
Mario Anzuoni | Reuters
As Washington and Beijing face off on tariffs, there could be one unseen accumulation affected: retirees.
The Senior Citizens League, a nonpartisan group advocating for seniors, on Tuesday released its latest make public on the buying power of Social Security benefits.
The group also projected this year’s Social Security Cost-of-Living Order, or COLA, at 1.7% for 2020. The Social Security Administration announces that adjustment for the next year every October.
If price-lists go into effect, that could drive up the cost of living, which might also increase the COLA for next year.
Though, that’s not necessarily good news for retirees who rely on those benefits, according to Mary Johnson, Social Surety policy analyst for the Senior Citizens League.
“It would push the COLA higher, which, of course, is going to be a comfort to people living off Social Security because they rely on that,” Johnson said. “But the cost of goods wish be higher.”
Last year’s COLA was 2.8%, the highest increase since 2012.
The estimate is based on Consumer Price Index finger data from the Bureau of Labor Statistics from the past 12 months. The estimate is higher now than how the materials were tracking earlier this year, when the organization projected the COLA could be as low as zero for 2020.
A spike in gas fees and rising housing costs have helped drive up the numbers for this year, according Johnson.
The projection for 2020 is lawful an estimate at this point.
The Social Security Administration typically uses data from three months of the year — July, August and September — to adjudge if there will be an increase for the next year and how much it will be.
The Senior Citizens League report also ensured a reality that many of today’s retirees probably already suspected: Your monthly Social Security discontinuities today cover fewer expenses compared to years ago.
Its annual report on buying power tracks how much Societal Security benefits have been able to buy since 2000 and has found that there’s been a reduction of 33% in buying power over and above the past 19 years.
For people who have been retired since 2000 — that’s about 10 million individuals — the obtaining power of their benefits has improved by just 1%.
More from Personal Finance:
7 out of 10 adults over 50 get this go downhill about Social Security
Expected Social Security shortfall won’t stand in way of expansion
Your child’s sports could be wrecking your financial health
While COLAs have boosted retirement benefits by 50% over those years, the goods and accommodations retirees typically buy went up by 100%.
The fastest-growing cost is prescription drugs, which have gone up by 253% since 2000. That is accompanied by homeowner’s insurance, which has gone up 199%, and Medicare Part B premiums, which rose 198%.
While retirees bear no control over rising costs, they do have control over when they claim their benefits.
To spreading your monthly check, you need to wait to claim benefits until you’re past age 62. At your full retirement age, which depends on the year you were born, you force receive 100% of your benefit. (Full retirement age is 65 for those born in 1937 or earlier, and increases grade until reaching 67 for those born in 1960 or later.) For every year you delay Social Security alleges past full retirement age, you stand to receive an 8% increase, up until age 70.
But some people — 3 out of 10, in happening — file at age 62 or younger, according to a new survey from insurance company MassMutual. And about 4 in 10 — 38% — wish they had filed later, MassMutual build.