Social Security helps many seniors enjoy an active retirement, so a recent announcement from the program will not be met with a positive response. Older adults receiving Social Security payments will see an increase of just 1.5 percent due to the cost of living adjustment. The figure is slightly down from last year and is among the smallest in the program's history since it started including cost of living, CNN Money reports.
The adjustment is calculated largely on the basis of the Consumer Price Index, which measures inflation rates across the country. While inflation has been relatively low over the last 12 months - 1.2 percent - it's unclear whether the additional $19 a month will help the million of seniors who rely on Social Security. Specifically, experts say that because seniors spend more on health care costs, their cost of living tends to be higher than younger adults. The AARP came out against the lower COLA.
"The COLA announced today is vital to millions, but at an average of just $19 per month, it will quickly be consumed by the rising costs of basic needs like food, utilities and health care," read a statement on the organization's blog.
AARP, along with other seniors' advocates, have suggested changing the way that the adjustment is calculated so it better reflects the retirement cost of living. The outcry has become even louder due to a push to move to a process known as chained CPI, which would track spending habits caused by rising prices. This could cause issues because consumers tend to spend less when prices rise, which would result in a lower COLA than already exists, CNN Money noted.