Calculation Leaves Seniors Needlessly Suffering

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COLA calculation
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Each year, the Social Security Administration releases the next year’s cost-of-living adjustment (COLA) for beneficiaries. While the COLA is meant to help seniors cover the cost of goods and services as inflation rises, seniors know that this increase isn’t always helpful. Instead, the COLA calculation might be based on faulty information.

COLA Calculation: Not What Seniors Need

COLAs are calculated based on an index of prices. This index reflects what the average wage earners in America buy. However, what seniors need is not always reflected in this index. Since 2010, there have been no COLAs three different years. This lack of an increase doesn’t just hurt retirees in the moment—it leaves seniors to scrimp and save for years.

Learn more about this calculation from USA Today’s article “Here’s how Social Security calculates its raises and why it should change.”

Over the years, missing COLAs have led to a gap of as much as $10,970 for some seniors. It’s clear that these nonexistent COLAs have led seniors to suffer. They earned these benefit increases. It’s time for Congress to take responsibility and take action.

The COLA Act of 2021 Would Boost Benefits, But Congress Is Failing to Act

One bit of good news for American retirees: a new bill has been introduced that could solve the problem of missing COLAs.

The COLA Act of 2021 would ensure that each year, Social Security beneficiaries receive an increase in their benefits. It would change the COLA calculation to avoid years of nonexistent COLAs. Each year, the increase would be based on one of two things:

  • A calculation based on an index of prices
  • The average of the COLAs of the previous ten years

If this bill passes, seniors would receive whichever calculation is greater. No more years of nonexistent COLAs.

NORA isn’t only demanding that Congress pass this bill. We’re also calling on lawmakers to reimburse seniors for years of missed COLAs. If $10,970 would help you or a loved one, sign our online petition today. Then follow us on Twitter and Facebook to see all of NORA’s updates!

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