Since 2000, the buying power of monthly benefits has fallen by more than a third, according to an annual report released Thursday by the Senior Citizens League, an advocacy group based in Alexandria, Virginia. In other words, the cost of goods and services common among retirees have collectively risen faster than the cost-of-living adjustment, or COLA, that Social Security recipients get every year.
The league’s annual report examines the costs that typically comprise household budgets of older Americans and compares their price change with annual COLAs. Based on those comparisons, the research found a 4 percent loss in Social Security buying power from January 2017 to January 2018 and a 34 percent decrease since 2000. While COLA increases since 2000 cumulatively have equaled 46 percent—matching inflation over those years—typical retiree expenses grew by 96.3 percent, the study shows. Of the 39 costs analyzed in the report, 26 grew faster than the percentage increase in COLAs from 2000 to 2018.
Housing and medical outlays top the list of fastest-growing expenses that retirees face. For example, average Medicare Part B premiums have risen 195 percent to $134 from $45.50 in 2000. Critics say that the COLA formula fails to consider the different spending patterns for retirees compared with the U.S. population at large. Some advocate for a different index—the Consumer Price Index for the Elderly—to be used to determine Social Security COLAs.
You can read the full article, inlcuding a table of the top fastest-growing retiree costs, at CNBC.com.