By Mary Johnson, editor
The Social Security cost-of-living adjustment (COLA) for 2020 will be announced October 10th and, according to the latest consumer price index data, it’s likely to be considerably lower than the COLA received this year which raised benefits 2.8%. The government’s consumer price index data indicates that inflation has fallen, and, that COLA recipients can expect to get a boost of about 1.6% in 2020. That would raise an average benefit of $1,460 by about $23.40 per month, a big drop from the $40.90 that people with that level of benefits received this year.
While retirees won’t be getting as much in their Social Security checks in 2020, the Part B premium is expected to go up considerably more. In 2019 most beneficiaries paid $1.50 per month more than in 2018. In 2020, however, the Medicare Trustees forecast that Part B premiums will increase from $135.50 to $144.30 per month — an estimated $8.80 per month more. After the deduction for Part B premiums, that would leave the retirees with average benefits, roughly $15 per month more to cover all other rising costs.
But did consumer price inflation really go down by that much?
We turned to you folks for answers. I asked whether you have experienced consumer prices falling or rising. The response was immediate. Virtually every email insisted that consumer prices over the past 12 months are going up— not down. We received many examples of rising costs, that frequently included prescription drug and medical costs. I even received multiple e-mails that complained about “shrinking” bottled orange juice. Major brands of orange juice that used to come in 64 oz. bottles are now being sold in 52oz bottles at a higher price.
In the coming months, TSCL will be sharing many of your comments with journalists, the public, and Members of Congress. To get us started, here are examples sent in by Dr. Roger W. L. who tracks his own personal consumer price “market basket.”
While Consumer Price Index Went Down The Costs Went Up —
|Item or service||Past Year Change||Past 3 Year Average|
|Total health care spending||5.5%||15.7%|
|Electric and gas utilities||2.9%||-0.3% (after blocking off 1/3 of house & adding insulation)|
|Homeowners association dues||0.0%||4.8%|
|Cable & Internet||3.1%||6.6%|
|All items* CPI-W through July 2019
Source: Bureau of Labor Statistics
Dr. Roger W. L. also sent this example of how costs for a specific item increased over a period of almost 13 years:
Water heater, 40 gal. August 2006 — $772 May 2019 — $1,774
“Same water heater, parts and installation,” Roger says. “Most of the inflation was the installation cost which went up about 4 times.”
This is an increase of $1,002 or 143% over almost 13 years— an average annual inflation rate of more than 10% per year.
A big thank you to all of you who sent your comments and examples. Your examples can help us confirm findings in our research data and to make the case to journalists, the public, and Members of Congress that strengthening Social Security COLAs is overdue, in order to improve the buying power of benefits. Please continue to send in examples of your “market basket” of cost increases! Send us an email at www.SeniorsLeague.org.