The latest estimate from The Senior Citizens League indicates that Social Security recipients will see a 2.8 percent increase in benefits for 2019. This would mark the largest annual cost-of-living adjustment (COLA) since 2012, but because seniors and the disabled are facing increased living expenses, including higher healthcare costs, the increase won’t reach far enough to meet the needs of many.
“While higher COLA for 2019 will be welcome, retirees may be disappointed as they learn what the cost of their Medicare premiums and prescription drugs will be for 2019,” said Mary Johnson, Social Security policy analyst for The Senior Citizens League.
The Analysis
“A recent study by TSCL that examined price changes in the goods and services typically purchased by retirees found that Social Security benefits have lost 34 percent of their buying power since 2000. Since that year, COLAs have increased Social Security benefits by a total of 46 percent, but typical expenses of retiree households have grown more than twice as fast — 96.3 percent. Medicare Part B, prescription drug out-of-pocket costs, and Medigap premiums were among the top ten fastest-growing costs since 2000.”
A small increase in benefits each year does not make-up for a reduced buying power of 34 percent over the last 18 years. Increased healthcare costs are not the only culprit as to why a beneficiary has seen their buying power reduced by more than one-third. Since 2000, seniors have experienced increased housing costs as real estate taxes have increased by 129 percent in the last 18 years and the cost to heat a home has increased by 181 percent since 2000. There is some limited good news, as some experts predict that the COLA for 2020 may be higher, which might help seniors a bit more with increased living costs they are faced with.
