COLAs Still Not Enough for Seniors

May 24, 2019 / Amanda Chase, Horsesmouth Assistant Editor

No matter how high the government sets next year’s cost-of-living adjustment (COLA) for Social Security recipients, it will fail to offset the declining purchasing power of American seniors. According to a new report from The Senior Citizens League, Social Security recipients have lost 33% of their buying power between 2000 and 2019.

“One would think that a higher cost-of-living adjustment in 2019 combined with relatively low inflation, would lead to an improvement of buying power in Social Security benefits,” said Mary Johnson, a Social Security policy analyst at the league and author of the report, in a statement. “But any improvement was offset by spiking costs of essentials, including out-of-pocket spending on prescription drugs.”

At best, the 2.8% Social Security COLA for 2019 delivered a one percentage point gain in the purchasing power of seniors, who had lost 34% of buying power between 2000 and 2018. The 2019 COLA raised the average Social Security payment of $1,400 a month by roughly $39, but that’s not enough to keep up with rising costs of daily living for many seniors, according to The Senior Citizens League. Early findings from its annual survey of seniors found that close to 80% of survey participants said their household spending rose by more than $39 per month this year.

Johnson estimates the COLA for next year will be about 1.7%, and that Medicare Part B premiums will increase 6.5%, or $8.80, above the current premium of $135.50.

Find the full article, along with a table of the top ten fastest growing costs for older Americans, at ThinkAdvisor.

 

IMPORTANT NOTICE
This material is provided exclusively for use by individuals with an active license to the Savvy Social Security Planning Program. Use of this material is subject to the Social Security Planning Program Agreement and applicable copyright laws. Unauthorized use, reproduction or distribution of this material is a violation of federal law and punishable by civil and criminal penalty. This material is furnished “as is” without warranty of any kind. Its accuracy and completeness is not guaranteed and all warranties express or implied are hereby excluded.

© 2019 Horsesmouth, LLC. All Rights Reserved.