COLAs Go Over The Fiscal Cliff
Economic forecasts for 2013 warn of a financial crisis ahead. Nobody is feeling it more acutely than seniors living on fixed incomes. Retirees and disabled adults won’t see much of a cost-of-living adjustment (COLA) increase in benefits this year. At 1.7%, the 2013 (COLA) is one of the lowest ever paid, not counting 2010 and 2011 when no COLA was payable at all. Timing couldn’t be worse.
Since the Social Security Administration announced the 2013 benefit boost last fall, fuel, food and healthcare costs have steadily climbed. U.S. households that heat with oil are expected to pay nearly 20 percent more this winter compared to last year. Homes that rely on oil heat will pay an average of $407 more this winter according to the U.S. Energy Information Administration.
Last summer’s draught killed crops in almost 80% of the continental U.S. Higher wheat, corn and soybean prices are showing up in grocery receipts. Senior couples can expect higher food costs to add about $410 and more to their food bill this year.
The base Medicare Part B premium that covers doctors and hospital outpatient services increased $5.00 in 2013. Overall healthcare costs are forecast to rise 7.5% this year— more than four times the amount of the COLA increase.
Despite known challenges ahead for seniors, the COLA may be the next victim of the fiscal cliff. Leading deficit reduction plans under discussion would significantly whittle the Social Security benefits that the majority of seniors count on for more than half of their income.
How far will your 2013 COLA go? What other options do we have to address Social Security’s solvency? Take TSCL's 2013 Senior Survey!
Sources: “Home Heating Oil Cost Forecast To Rise 19 Percent This Winter,” Reuters, October 11, 2012. “Prepare To Pay An Extra $875 For Food In 2013,” Nicole Seghetti, The Motley Fool, August 6, 2012. “Healthcare Cost To Rise 7.5 Percent In 2012 Report,” David Morgan, Reuters, May 31, 2012.
