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The Disability Guys

This article was brought to you by NYS workers’ compensation lawyers at Markhoff & Mittman P.C.

In a spirited response to the challenges created by rising inflation, the Social Security Administration announces a 3.2 percent increase in the checks of over 71 million Americans in 2024. This adjustment is a remarkable rise from typical cost-of-living adjustments, but it also indicates a significant decrease from the record-setting 8.7 percent increase observed in 2023 during a period of widespread inflation.

Anticipated Benefits for Retired Workers

This January, retired workers are set to experience an average monthly benefit increase of $59, reaching $1,907 from $1,848. Jo Ann Jenkins, the chief executive of AARP, expresses relief for retirees, stating, “Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices.” The positive adjustment extends beyond retired individuals, benefitting millions of other recipients, including disabled workers, survivors of workers, and low-income individuals under the Supplemental Security Income program. This boost exceeds the 2.6 percent average observed over the past two decades.

While prices remain inflated, they have considerably toned down since pandemic-related disruptions and supply shortages drove them to rapidly increase. The Federal Reserve has taken measures to cool inflation by raising its standard interest rate to the highest level in 22 years.

Social Security’s Significance for Lower-and Middle-Income Retirees

Social Security benefits hold specific significance for lower-and middle-income retirees, often lacking workplace retirement accounts like 401(k)s. The unique feature of Social Security lies in its lifetime inflation adjustments. This is crucial for retirees to maintain buying power considering the costs for housing, food, and medical care continue to rise.

Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities, highlighted, “Unlike Social Security, the value of private savings — like 401(k)s and I.R.A.s — erodes over time.”

Challenges: Rising Medicare Part B Premiums and Financing Shortfall

Despite the positive news, retirees may see some additional funds taken up by rising Medicare Part B premiums. Concerns keep growing over the long-term financial efficiency of Social Security, with the trust fund expected to be drained in 2033, potentially leading to a 23 percent reduction in benefits across the board.

As Alicia Munnell, director of the Center for Retirement Research at Boston College, emphasized, “It is not an intellectual exercise. It is a political exercise. And I don’t think Congress wants to see a cut of benefits of 23 percent across the board.”

Debate Over Adjustment Methods and Future Solutions

In the face of these challenges, experts continue to debate the accuracy of the Consumer Price Index for Urban Wage Earners and Clerical Workers (C.P.I.-W) as the basis for Social Security adjustments. Some advocate for considering the Consumer Price Index for the Elderly (C.P.I.-E), which may better reflect the spending patterns of retirees.

Legal Options for SSD Recipients Impacted by Inflation

At Markhoff & Mittman PC, we understand the challenges faced by Social Security Disability recipients in the current economic climate marked by inflation. For those struggling with the impact of rising prices, it’s essential to explore potential legal avenues. Social Security Disability recipients may be entitled to cost-of-living adjustments (COLA) to help balance the effects of inflation. Additionally, our legal experts can explore other government payouts or benefits that could provide compensation and financial relief. It’s necessary to consider all available options, such as supplemental programs or assistance designed to support individuals facing increased living costs. As The Choice for all injury and disability legal needs, our firm is committed to navigating the complex legal landscape to ensure that Social Security Disability recipients receive the compensation they rightfully deserve in the face of economic hardships.

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