Got your eye on the upcoming October announcement of the Social Security cost-of-living adjustment? Here’s what one influential group predicts.
Seniors pining for a sip of COLA (the Social Security cost-of-living adjustment) may finally get their wish, a new study reports.
It’s been quite a dry spell for Social Security retirement benefit recipients. In 2015, the announced inflation adjustment for 2016 was zero. In 2016 the announced adjustment for 2017 was 0.3%. In fact recipients would have to look back to 2011 when a 3.6% adjustment for 2012 was announced to even get over 2%. (And the two years prior to that? The COLA was zero.)
But a new report from The Senior Citizens League (TSCL) anticipates a 2.1% COLA to be announced this coming fall for 2018.
That may be a small comfort. The study also finds Social Security beneficiaries have lost nearly one-third of their buying power since 2000.
More than 800 survey respondents confirmed monthly household expenses have been climbing sharply in the past year. Most, 67% of respondents, said monthly expenses climbed by more than $79.
“With today’s Social Security benefit averaging just $1,320 per month, that’s an unsustainable level of rising spending when there’s just a 0.3% benefit increase to match,” said TSCL Social Security Policy Analyst Mary Johnson, who wrote the study. “To put it in perspective, for every $100 worth of expenses seniors could afford in 2000, they can afford just $70 today.”
As seniors’ spending power has declined since 2000, Johnson’s study found many of the 10 fastest-rising costs are aimed squarely at them. Premiums for Medicare Part B – the health care insurance earned by those over 65 – topped the list up from $45 a month in 2000 to $134 in 2017, a more than 195% climb.
Other costs on the rise include prescription drugs, homeowner’s insurance, real estate taxes, Medicare Supplement Insurance, pet care, and total medical out-of-pocket costs for people 65 and up. And don’t forget, for many seniors, part of the Social Security benefit may be subject to income taxes.
To better serve seniors receiving Social Security and reflect the rising costs of the things they buy, TSCL advocates changing how COLAs are calculated, from using a consumer price index that focuses on urban wage earners to a price index that focuses on the items those over 62 buy, such as health care.
With 1.2 million supporters, The Senior Citizens League claims to be one of the nation’s largest nonpartisan organizations representing seniors.www.SeniorsLeague.orgfor more information.
Things to Consider:
- Think about how much you are counting on Social Security for retirement income.
- Social Securitty cost of living increases aren’t a guarantee, have you considered other avenues for retirement income?