Every month, nearly 63 million people receive Social Security benefits, the vast majority of whom are senior citizens. More than 3 out of 5 of these seniors rely on their Social Security check for at least half of their monthly income.
In 2019, Social Security recipients have received a cost-of-living adjustment (COLA) in the amount of 2.8%. This “raise” is the largest increase in benefits since 2012, and is meant to account for inflation.
Figures released by the Social Security Administration (SSA) show that the average retired worker received an estimated $1,422.39 per month in 2018. The COLA increase of 2.8% would bring the retired worker an extra $39.83 per month, for a monthly total of $1,462.22. This works out to around $480 per year.
The Social Security program is designed to replace about 40% of the average retirees’ working wages. However, this percentage could be higher for low-income individuals and significantly lower for those in higher income brackets. The takeaway here is that most people should assume that Social Security benefits will not be sufficient to cover their entire income needs in retirement.
Social Security and Cost of Living
The actual purchasing power of Social Security dollars has seen a steady decline for the past two decades. What $100 would have purchased in 2000 would buy only about $66 worth of the same goods and services now. However, housing and medical care costs tend to get underweighted, which leads to an insufficient COLA for most senior citizens.
The other problem you probably already know. Social Security itself is in trouble. The latest forecast shows that the asset reserve of $2.89 trillion will be exhausted by 2034 – because as of 2018, the program spends more than it collects in revenues each year. At the same time, demographic changes result in an increasing gap between workers who retire and workers who still pay into the Social Security system. Some estimates suggest that if the SSA’s excess cash completely disappears, there could be an across-the-board cut in benefits of up to 21%, unless Congress intervenes.
And that is another problem altogether. It seems that Washington D.C. lawmakers are not able to agree on any type of fix for the faltering Social Security system. Though both Republicans and Democrats recognize the problem and the need to fix it, neither party seems inclined to budge when it comes to finding common ground to reach any type of solution.
In sum, while Social Security recipients receive 2019’s COLA increase, they should definitely keep in mind the bigger picture challenges that loom in the future – and do what they can to plan accordingly. Our Long Beach social security attorneys continue to monitor the situation closely, keeping an eye on n the trends and what upcoming legislation (or lack of upcoming legislation) might affect our clients’ benefits.
Long Beach Social Security Lawyers
If you or a loved one is unable to work due to a disabling injury, medical condition or disease our skilled and experienced lawyers are here to help you get the maximum Social Security Disability benefits for which you qualify.
The Law Office of Cantrell Green is a group of highly qualified and experienced disability attorneys who have obtained millions of dollars in Social Security Disability benefits for thousands of clients in Long Beach, Orange County and the greater Los Angeles. Our lawyers care about every client, and fight tirelessly to obtain the benefits you deserve.
Free Social Security Disability Lawyer Consultation: 800-964-8047