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Anyone who’s seen the statistics on the never-ending hikes at the gas pump this year probably won’t be surprised to learn that the Iran war and inflation have combined to make modern living (and spending) more expensive.
In fact, cnbc It was reported that inflation is at the highest level in two years. Additionally, the average price of gas in the US as of April 15 is $4.108 per gallon (it was only $3.17 at this time last year).
That said, some help could be on the way for retirees.
How did gas and inflation become so high?
Despite increased demand for energy and commodities following the COVID-19 pandemic, supply chains remained disrupted – a mismatch that drove up prices and inflation as a kind of economic pandemic hangover. Meanwhile, inflation also rose more broadly due to higher stimulus spending during COVID-19, which led to higher wages and borrowing costs as well as increased consumer demand.
Additionally, geopolitical turmoil, most recently the Iran war, has severely disrupted oil production and distribution. About 20% of the world’s oil supply passes through the nearby Strait of Hormuz, which has been closed and is slowing oil deliveries, sending prices rising at the gas pump.
What about Social Security?
While higher gas prices have exacerbated the current financial crisis in the US, help may be on the way for Social Security recipients.
As reported by CNBC, Mary Johnson, an independent Social Security and Medicare policy analyst, has predicted that Social Security cost-of-living adjustments (COLAs) could increase by a sharp 3.2% in 2027. Johnson’s projection is based primarily on March consumer price index data that revealed the most recent record high for inflation.
A COLA is an annual adjustment to Social Security benefits that keeps payments in line with current inflation levels. In 2026, the COLA increases the average monthly Social Security check by 2.8%. Before the Iran war began (and gas prices skyrocketed), early estimates predicted a 2027 COLA of 2.8% or less.
A COLA of 3.2% would be in line with the overall decade COLA average of 3.1% — although that average is somewhat offset by steep post-pandemic COLA increases of 5.9% in 2022 and 8.7% in 2023, according to CNBC.
Editor’s note on political coverage: GOBankingRates is non-partisan and strives to objectively cover all aspects of the economy and offer balanced reporting on politically focused finance stories. You can find more coverage on this topic here GOBankingRates.com.
