The 2023 Social Security Situation

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Social Security
Social Security

A bump in the COLA in 2023 to 8.7% has had a consequence of an outpouring in the spending of seniors comparatively to the other generational sections. Does the question arise that has to maintain the living standards of the seniors fiddled with the attempts of the Federal Reserve to curb inflation?

From the point of view of the Bank of America Institute, the week which ends on the 18th of February, beneficiaries of Social Security and baby boomers who were born before the year 1964, upped the household expenditure ranging between 4-6% YoY as compared to the year over year 2% for every age group.

Making use of the transaction data of the Bank of America, the Institute has come to the conclusion that those households who have been acquiring payments from Social Security have shown growth from November 2022 in expending by 2.1% higher in comparison to those families that have not been getting the benefits of Social Security.

The Increased Demand For Social Security Might Perpetuate Inflation

An increase in consumer expenditure is directly proportional to the fear which has been affecting the American ongoing inflation in high numbers taking lead till today. Few critics have come up with the detrimental outcome expended by the senior citizens which has taken a toll on inflation which also is a threat to the inflation efforts of the Fed and also the IRA introduced in 2022 by President Joe Biden.

When inflation and consumer prices were stable at 40-year highs with the COLA and Social Security had been lagging behind, those who had retired had been noticing the benefits having a limit which compelled the retirees to take measures in saving drastically and also economize on domestic goods like medicines and even food. In 2022, inflation has outpaced the COLA increase of 5.9%.