Seniors Lose 24 Percent of Their Buying Power Since 2000

2010 Annual Survey of Senior Costs Finds Expenses Have Increased Twice as Fast as Social Security COLA

News provided by

The Senior Citizens League

May 25, 2010, 05:14 ET

WASHINGTON, May 25 /PRNewswire/ -- Seniors have lost almost one-quarter of their buying power since 2000, according to the Annual Survey of Senior Costs, released today by The Senior Citizens League (TSCL). TSCL is one of the nation's largest nonpartisan seniors advocacy groups.

To view the multimedia assets associated with this release, please click: http://multivu.prnewswire.com/mnr/seniorsleague/43965/

(Photo: http://www.newscom.com/cgi-bin/prnh/20100525/MM07877LOGO )

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 average benefits just 31 percent while typical senior expenses have jumped almost 63 percent, more than twice as fast.

Seniors are receiving no COLA this year for the first time since the automatic COLA's introduction in 1975, and are forecast to receive no COLA again next year.


 		  

Category

Expense

Cost in 2000

Cost in 2010

Percent Increase,

2000-2010

  

Housing

Ownership costs

N/A

N/A

31%

  

 

Apartment rental

N/A

N/A

38%

  

 

Homeowner's insurance (annual)

$508.00


 

$1,059.00


 

108%

  

 

Real estate tax (annual)

$690.00

$1,223.88

77%

  

 

Heating oil (gallon)

$1.15

$2.88

150%

  

 

Natural gas (per thousand cubic foot)

$6.37

$10.39

63%

  

 

Electricity (per kw hr)

$.08

$.12

50%

  

Transportation

Regular gas (gallon)

$1.26

$2.75

118%

  

 

Oil change

$23.11

$32.98

43%

  

 

Auto maintenance/ repair

N/A

N/A

41%

  

Medical

Total out-of-pocket medical expenses

$1,074.50

$1,546.70

44%

  

 

Prescription drugs, generic, brand, special

$623.70

$900.69

44%

  

 

Dental, general visits

$377.40

$526.50

40%

  

 

Medicare Part B premiums (monthly)

$45.50

$110.50

143%

  

Food

10 lbs. potatoes

$2.98

$4.98

67%

  

 

1 lb. butter

$2.52

$2.81

12%

  

 

Milk (gallon)

$2.78

$3.22

16%

  

 

Eggs (dozen)

$0.93

$1.79

93%

  

 

Ground chuck (lb.)

$1.90

$2.83

49%

  

 

Bread, white loaf

$.91

$1.36

50%

  

 

1 lb. coffee

$3.54

$3.81

8%

  

 

Oranges (lb.)

$.61

$.90

48%

  

Recreation

Movie ticket

$5.39

$7.50

39%

  

 

Recreation, misc.

N/A

N/A

11%

  

Communication

First class postage  

$.33

$.44

33%

 

 

Basic phone service, local

$55.37

$66.92

21%

  

Apparel

Clothing, misc.

N/A

N/A

(-8%)

  

Other

Personal care products

N/A

N/A

6%

  

 

Personal care services

N/A

N/A

31%

  

 		  
         
 

"This study makes clear what millions of seniors already know too well: for every $100 worth of expenses they could afford in 2000, they can afford just $76 today," said Daniel O'Connell, chairman of The Senior Citizens League. "What has long been a difficult situation for seniors is quickly becoming a dire one."

A senior with the average Social Security benefit in 2000 received $816 per month, a figure that rose to $1072.30 by 2010. However, that senior would require a Social Security benefit of $1,328.40 per month in 2010 just to maintain his or her 2000 lifestyle.

The study examined the increase in costs of 29 key items between 2000 and 2010. The items were chosen because they are emblematic of the costs seniors must bear. Twenty of the 29 costs exceeded the COLA. The selected items represent eight categories, weighted by approximate expenditure.

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 the Consumer Price Index (CPI) 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 expenditures.

However, the government does track the spending patterns of older Americans, and has done so since 1983 with the CPI for Elderly Consumers, or 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 $12,856 more over the past 26 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. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.

SOURCE The Senior Citizens League

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