Seniors Losing their Buying Power: Survey
Seniors have lost almost one-third of their buying power since 2000, according to the Annual Survey of Senior Costs, released Thursday by The Senior Citizens League (TSCL), which is among the leading nonpartisan seniors advocacy groups.
In most years, 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 just 31 percent, while typical senior expenses have jumped 73 percent, more than twice as fast.
[ Also Read: Fighting Hunger Together with Walmart ]In 2011, for the second consecutive year, seniors received no COLA. Prior to 2010, seniors had received a COLA every year since 1975, when the automatic COLA was introduced. Seniors are forecast to receive a very small COLA next year.
“For many years, seniors have watched helplessly as the value of their benefits has eroded. Those losses have added up, and millions of seniors – among our most vulnerable citizens – are barely able to scrape by today,” said Larry Hyland, chairman of The Senior Citizens League. “To put it in perspective, for every $100 worth of expenses seniors could afford in 2000, they can afford just $68 today.”
[ Also Read: Celebs Join Hands to Combat Hunger in the U.S. ]A senior with an average Social Security benefit in 2000 received $816 per month, a figure that rose to $1,072.30 by 2011. However, that senior would require a Social Security benefit of $1,414.70 per month in 2011 just to maintain his or her 2000 lifestyle.
The study examined the increase in costs of 30 key items between 2000 and 2011. The items were chosen because they are typical of the costs seniors must bear. Price increases for 22 out of the 30 costs exceeded the COLA.
The selected items represent eight categories, and each category was weighted (based on typical expenditure levels) in order to calculate the overall loss of buying power.
[ Also Read: Over 43 Million Americans Now Live in Poverty ]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, The Senior Citizens League is lobbying for a change in which Consumer Price Index (CPI) is used to determine the COLA.
The government currently calculates the COLA based on the CPI for Urban Wage Earners and Clerical Workers (CPI-W), a slow-rising index that tracks the spending habits of younger workers who don’t spend as much of their income on health care.
[ Also Read: Bill Gates Suggests to Save 10 Million Lives ]The government does track the spending patterns of older Americans, and has done so since 1983 using the CPI for Elderly Consumers (CPI-E). By tying the annual increase in the COLA to the CPI-E, seniors would see much-needed relief in their monthly checks.
For example, a senior who retired with a benefit of $460 in 1984 would have received $13,723 more over the past 27 years with the CPI-E.
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.
