June 17, 2016--Social Security
beneficiaries have lost 23 percent of their buying power since 2000, according
to the 2016 Survey of Senior Costs released today by The
Senior Citizens League (TSCL).
The findings indicate that except
for higher medical and prescription drug costs, overall prices have changed
relatively little over the past year. Inflation remains very low, almost nil,
mainly due to the dramatic drop in oil prices. “TSCL is concerned,” says TSCL
Chairman Ed Cates.
“There appears to be a high risk of
either an extremely low annual cost - of - living adjustment (COLA) next year,
or worse — none at all,” he says.
Older Americans and disabled Social
Security beneficiaries received no cost-of-living adjustment (COLA) in 2016 due
to low inflation last year, but TSCL’s new survey found that lower inflation
didn’t translate into lower household expenses in 2015.
In fact, nearly 1,200 survey
respondents recently said that monthly household expenses made steep increases
in 2015. The majority, 72%, indicated their monthly expenses went up by more
than $79. “With today’s Social Security benefit averaging $1,230 per month,
that’s an unsustainable level when there’s no benefit increase to match,” Cates
says.
In most years, Social Security
beneficiaries receive a small increase in their Social Security checks,
intended to help them keep up with rising costs. But since 2000, the COLAs rose
a total of just 36.3 percentage points while typical senior expenses have
jumped 75.3 percent.
“Going without any COLA in 2016 has
long-term consequences for retirees when real costs continue to climb,” Cates
says. “People must spend down retirement savings more quickly than expected,
and those without savings are either going into debt, or going without,” he
says.
A person with average Social
Security benefits in 2000 received $816 per month, a figure that rose to
$1,166.30 by 2016. However, according to the survey, that individual would
require a Social Security benefit of $1,430.50 per month in 2016 just to
maintain his or her 2000 buying power, the study found.
The study examined the increase in
costs of 38 key items between 2000 and January 2016. The items were chosen
because they are typical of the costs that most Social Security recipients must
bear. Of the 38 costs analyzed, 29 exceeded the amount of increase in the COLA
over the same period. The selected items represent eight categories, weighted
by approximate expenditure.
“This study illustrates why Congress
should enact legislation to provide an emergency COLA this year,” says Cates.
“To put it in perspective, for every $100 worth of expenses seniors could
afford in 2000, they can afford just $77.00 today,” Cates adds.
A majority of the 57 million senior
and disabled Americans who receive Social Security depend on it for at least 50
percent of their total income, and one in four beneficiaries relies on it for
90 percent or more of his or her total income.
To help protect buying power of
benefits, TSCL supports legislation that would base COLAs on the Consumer Price
Index for the Elderly. TSCL and its members are lobbying Congress for an
emergency COLA for 2016. To learn more, visit http://www.SeniorsLeague.org.
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With 1.2 million supporters, The
Senior Citizens League is one of the nation’s largest nonpartisan seniors
groups. Its mission is to promote and assist members and supporters, to educate
and alert senior citizens about their rights and freedoms as U.S. Citizens, and
to protect and defend the benefits senior citizens have earned and paid for.
The Senior Citizens League is a proud affiliate of The Retired Enlisted
Association. Visit http://www.SeniorsLeague.org for
more information.
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