Some have tried to do basic math after the 2.5% cost-of-living adjustment (COLA) increase was announced in October, attempting to determine how much it would help or possibly even hurt their finances, and the findings are grim.
The increase was done using CPI-W stands for the Consumer Price Index for Urban Wage Earners and Clerical Workers coupled with the inflation for the third trimester of the year.
It had been attempted to tame inflation by the time, and the figure was low, which would be desirable in an ideal world. While lower inflation and thus lower COLA is a sign of economic healing and that prices will not continue to rise to the roofs, it comes at the cost of giving little money to those who are trying to meet the already higher costs.
For those who want an idea of how much benefits will increase with the cola, the following table might help:
| AGE | Current Average Retirement Benefit | Retirement Benefit After COLA | Change in Monthly Social Security Benefit |
| 62 | $1,298.26 | $1,330.72 | $32.46 |
| 67 | $1,563.06 | $1,602.14 | $39.08 |
| 70 | $2,037.54 | $2,088.48 | $50.94 |
While some are wondering whether it is a positive thing that the increase is a relatively smaller one, more people are objecting to the index that underlies it.
The CPI-W enthusiasts claim that the formula is incorrect because it doesn’t take inflation that affects today’s retirees into consideration, and they propose a new formula, CPI-E or the Consumer Price Index for Americans aged 62 and Higher, which reflects inflation affecting the elderly better than CPI.
Shannon Benton, the executive director of The Senior Citizens League (TSCL) said that this year too has been lost which could have provided the seniors with the financial help deserved by implementing the COLA formula shift from the CPI-W to the CPI-E to encompass the altering expenditures of seniors.Â
