As Washington and Beijing face off on tariffs, there could be one unseen group affected: retirees.
The Senior Citizens League, a nonpartisan group advocating for seniors, on Tuesday released its latest report on the buying power of Social Security benefits.
The group also projected this year's Social Security Cost-of-Living Adjustment, or COLA, at 1.7% for 2020. The Social Security Administration announces that adjustment for the next year every October.
If tariffs go into effect, that could drive up the cost of living, which might also increase the COLA for next year.
However, that's not necessarily good news for retirees who rely on those benefits, according to Mary Johnson, Social Security policy analyst for the Senior Citizens League.
"It would push the COLA higher, which, of course, is going to be a relief to people living off Social Security because they rely on that," Johnson said. "But the cost of goods would be higher."
Last year's COLA was 2.8%, the highest increase since 2012.
The estimate is based on Consumer Price Index data from the Bureau of Labor Statistics from the past 12 months. The estimate is higher now than how the data were tracking earlier this year, when the organization projected the COLA could be as low as zero for 2020.
A spike in gas prices and rising housing costs have helped drive up the numbers for this year, according Johnson.
The projection for 2020 is just an estimate at this point.
The Social Security Administration typically uses data from three months of the year — July, August and September — to determine if there will be an increase for the next year and how much it will be.
The Senior Citizens League report also confirmed a reality that many of today's retirees probably already suspected: Your monthly Social Security checks today cover fewer expenses compared to years ago.
Its annual report on buying power tracks how much Social Security benefits have been able to buy since 2000 and has found that there's been a reduction of 33% in buying power over the past 19 years.
For people who have been retired since 2000 — that's about 10 million individuals — the purchasing power of their benefits has improved by just 1%.
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While COLAs have boosted retirement benefits by 50% over those years, the goods and services retirees typically buy went up by 100%.
The fastest-growing cost is prescription drugs, which have gone up by 253% since 2000. That is followed by homeowner's insurance, which has gone up 199%, and Medicare Part B premiums, which rose 198%.
While retirees have no control over rising costs, they do have control over when they claim their benefits.
To increase your monthly check, you need to wait to claim benefits until you're past age 62. At your full retirement age, which depends on the year you were born, you will receive 100% of your benefit. (Full retirement age is 65 for those born in 1937 or earlier, and increases gradually until reaching 67 for those born in 1960 or later.) For every year you delay Social Security claims past full retirement age, you stand to receive an 8% increase, up until age 70.Â
But some people — 3 out of 10, in fact — file at age 62 or younger, according to a new survey from insurance company MassMutual. And about 4 in 10 — 38% — wish they had filed later, MassMutual found.