The tens of millions of Americans who currently wait for how much Social Security payments will rise can kiss goodbye the chance it will be 10%. The official announcement will be made in the middle of next month.
However, the increase should be among the largest in years. With any luck, because of consumer price index numbers, the jump could be 9%. Without any luck, it could be as low as 8%. As the cost of living in the United States soars, inflation will eat up every bit of the new payout.
Future beneficiaries should be worried about whether they will get any raise at all. The payments actually could drop year over year, starting in a decade.
The results of the 2034 cliff will be: “At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 78 percent of scheduled benefits,” according to the Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.
Inflation recently has not just risen. It has risen in a way that will persist perhaps for years. While there have been signs in the past month that inflation has moderated, it is primarily because of a drop in gasoline prices and not a moderation across a much wider range of goods and services. The cost of basics, which include food and housing, have remained stubbornly high.
Several inflationary pressures that will not go away include food, clothing and mortgage rates. Crop yields have been threatened by both drought and flooding. Clothing costs have been hit by supply chain problems. A jump in home loans, particularly for those that have variable rates, may be factors for the balance of this decade.
Other cost threats will be more occasional. Gas prices could rocket again because of the sharp reduction in energy exports to Europe. Supply chain disruptions are not over. A rail strike could hit the United States as soon as next week.
The argument that Social Security will run out of money has gone on for years. Recently, the odds that will happen have taken a sharp turn up.
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