Seniors have lost almost one-third of their buying power since 2000, according to the 2013 Annual Survey of Senior Costs, conducted by The Senior Citizens League (TSCL). TSCL's latest report adds fuel to the heated debate over controversial budget proposals to cut Social Security cost-of-living adjustments (COLAs).
According to the study, the Social Security Cost-of-Living Adjustment (COLA) has increased benefits just 38% since 2000, while typical senior expenses have jumped 81 percent, more than twice as much. Seniors with average Social Security benefits in 2000 received about $816 per month, a figure that rose to $1,129.80 by 2013. However, those seniors would require a Social Security benefit of $1,477.00 per month in 2013 just to maintain their 2000 level of buying power.
Inflation has been at historic lows in recent years and seniors received a 1.7 percent COLA this year. "For every $100 worth of expenses seniors could afford in 2000, they can afford just $69 today," says study author and Advisor editor Mary Johnson.
The study examined the increase in costs of 32 key items between 2000 and January 2013. The items were chosen because they are typical of the costs seniors must bear. Of the 32 costs analyzed, 20 exceeded the total percentage of increase in the COLA over the same period.
The following chart illustrates the ten fastest rising senior costs:
Top Ten Fastest Rising Senior Costs:
|Rank||Expense||Cost in 2000||Cost in 2013||Percent increase 2000-2013|
|#10||Pound of coffee||$3.54||$5.90||67%|
|#9||Pound of ground chuck||$1.90||$3.40||79%|
|#7||10 pounds of potatoes||$2.98||$5.98||101%|
|#6||Real estate taxes||$690.00||$1,405.00||104%|
|#4||Medicare Part B premiums||$45.50||$104.90||131%|
|#3||Gallon of gasoline||$1.31||$3.37||157%|
|#2||Auto oil change||$23.11||$66.03||186%|
|#1||Gallon home heating oil||$1.15||$3.97||247%|
A majority of seniors 65 and older who receive Social Security 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. TSCL is fighting proposals to cut COLAs. TSCL believes that seniors could receive a more fair COLA if the government were to use a consumer price index that more closely tracked the spending patterns of seniors.
Seniors wanting to learn how much a COLA cut would cost in Social Security income should visit the TSCL Chained COLA calculator.