May 8, 2008
Consumers are all too aware that the costs of food and energy have skyrocketed in the last few months. But a senior citizens' group says older Americans have seen their dollars stretched ever-thinner for much longer, and have lost 51 percent of their buying power since 2000.
Each year, seniors receive a small increase in their Social Security checks, intended to help them keep up with the costs of inflation.
But since 2000, the Social Security Cost of Living Adjustment (COLA) has increased average benefits just 24 percent while typical senior expenses have risen by 88 percent, almost four times as fast, according to a report by the Senior Citizens League.
The study examined the increase in costs of fifteen key items between 2000 and 2008. The items were chosen because they are emblematic of the costs seniors must bear. Twelve of the fifteen costs exceeded the COLA - and three jumped by triple digits. The selected items represent seven categories, weighted by approximate expenditure: housing, transportation, medical, food, recreation, communication, and apparel.
A senior with the average Social Security benefit in 2000 received $816 per month, a figure that rose to $1013.50 by 2008. However, that senior would require a Social Security benefit of $1,531.60 per month in 2008 just to maintain his or her 2000 lifestyle, the study said.
The group also says a majority of the 37 million Americans aged 65 and over who receive a Social Security check depend on it for at least 50 percent of their total income, and one in three beneficiaries rely on it for 90 percent or more of their total income.
To help increase buying power and offset the cost of Medicare Part B, the League is lobbying for a change in the Consumer Price Index (CPI) used to determine the COLA.
The government currently calculates the COLA based on the CPI for Urban Wage Earners and Clerical Workers (CPI-W), but the group says the COLA should be based on government data that tracks the spending patterns of older Americans.
