Press Brief 12.12.2023 Two-thirds of Seniors Say Household Budget 10% Higher Than a Year Ago

Press Brief 12.12.2023 Two-thirds of Seniors Say Household Budget 10% Higher Than a Year Ago

For immediate release:

December 12, 2023

Two-thirds of Seniors Say Household Budget 10% Higher Than a Year Ago

Sticky Inflation Worst For Many High-Ticket Senior Costs

 More than two-thirds of older adults say their monthly budget for essential items such as housing, food, and prescription drugs is 10 percent higher than one year ago. According to the latest survey by The Senior Citizens League (TSCL), this is occurring while the inflation rate is slowing. Even though inflation, as measured by the same index used to calculate the cost-of-living adjustment, was 3% in November, prices remain high for some of the biggest-ticket budget items of older households, says The Senior Citizens League (TSCL). “Housing, motor vehicle insurance, the cost of hospitals and care of invalids at home — these are the savings-draining black holes even when inflation is low,” says Mary Johnson, Social Security and Medicare policy analyst for The Senior Citizens League. “Yet these are the very categories seeing the most persistent and painful inflation right now,” Johnson says.

Social Security recipients are in the process of learning how much the 2024 cost of living adjustment (COLA) will raise their benefits for 2024. The Social Security Administration mails notices about the changes the entire month of December. The new 3.2% COLA takes effect in January, but rising Part B premiums will take a bigger chunk of benefits, and so will tax withholdings (if any are currently withheld). For those who don’t want to wait for the mail, beneficiaries can view their COLA notice online with an online “my Social Security” account on the Social Security Administration’s website.

The following list illustrates ten categories with the highest inflation that seniors are trying to cope with during the holidays.

Item Percentage of increase Compared with 3.2% COLA
1 Motor vehicle insurance 19.20% 6.0 times faster
2 Admission to sporting events 16.40% 5.1 times faster
3 Motor vehicle repair 12.70% 3.9 times faster
4 Beef roast 12.50% 3.9 times faster
5 Veterinarian services 9% 2.8 times faster
6 Outpatient hospital services 7.30% 2.3 times faster
7 Rent 6.90% 2.1 times faster
8 Homeowners’ costs 6.70% 2.1 times faster
9 Care of invalids at home 6.50% 2.0 times faster
10 Frozen vegetables 6.10% 1.9 times faster

Bureau of Labor Statistics, November CPI-U data, December 12, 2023.

Compiled by The Senior Citizens League

Medicare healthcare costs: Medicare premiums and out-of-pocket costs often catch retirees by surprise. The following new tables illustrate the significant portion of income spent on healthcare by retirees and the five most postponed healthcare costs.

Portion of Total Household Budget That Retirees Spend On Healthcare Costs

Including Medicare Premiums And Out of Pocket Costs

Percentage of Household Income Percentage of Response
Less than 16% 32%
16%-29% 34%
30%-up 19%
Not sure 15%

Source: The Senior Citizens League

2023 Senior Survey, 2,275 responses, June 23, 2023.

Five Most Postponed Healthcare Costs By Adults Aged 65 And Up

Type of service or cost Percentage Who Postponed Medicare coverage?
Dental care, including services such as bridges, dentures, and implants 64.0% No
Optical exams and/or prescription eyeglasses 42.0% Very Limited - Must qualify based on certain eye conditions.
Prescription drugs 32.0% Yes - Some drugs may not be covered by the plan. Many plans have high deductibles and out-of-pocket costs.
Health deductibles and out-of-pocket costs, worry about unexpected bills. 31.5% Yes - Medicare Advantage plans often have very high out-of-pocket maximums, leaving enrollees underinsured.
Hearing exam and/or hearing aids. 25.0% No - OTC hearing aids are now available, but selection and adjustment may be difficult.

2023 Retirement Survey, 4,425 responses, November 30, 2023.