Those receiving Social Security checks will be disappointed for the second year in a row as the annual cost-of-living increase will not be implemented for 2011. The 2010 failed increase was the first time in three decades that Social Security recipients did not receive their cost-of-living adjustments and it’s happening again.
Low Inflation Equals Failed Increases
As with last year, inflation has been low due to the recession, said the Bureau of Labor Statistics on Friday morning. As a result, the 2-3 percent increases that usually hit checks in January will not be seen.
There wasn’t a cost-of-living increase, says the bureau, so it’s not feasible to increase the checks. Unfortunately, this means the higher-than-normal 5.8 percent increase beneficiaries received in 2009, along with any savings, will have to suffice.
Health Care and Medicare Costs Still Increasing
One major problem that beneficiaries face is that while their Social Security checks aren’t increasing, their Medicare and general health care costs will. To make up the difference for 2010 checks, the government issued a $250 one-time payment to beneficiaries. While it wouldn’t make up the difference completely, it was able to help some.
The good news is that President Barack Obama has called to have the same checks issued again this year to help make up the difference.
Unfortunately, the lack of an increase is just another indicator that despite the fact that some say the recession has come to an end, times are still definitely tough. With unemployment still high and seniors now having to pull more from their bank accounts to pay for coverage even with government-subsidized health insurance, it looks that times may remain tough for months or possibly even years to come.
