ALBANY, Ga. -- A recently completed survey of senior costs by The Senior Citizens League shows older Americans have lost almost one-quarter of their buying power since 2000.
According to TSCL's 2010 Annual Survey of Senior Costs, since 2000, annual cost-of-living adjustments (COLAs) have increased average Social Security benefits by just 31 percent while seniors' typical expenditures have increased almost 63 percent -- more than twice as fast.
Seniors received no COLA in 2010 for the first time since the COLA
became automatic in 1975.
A senior with an average Social Security benefit in 2000 received $816 a month. Today that benefit has increased to $1,072.30 per month.
However, a senior would require a Social Security benefit of $1,328.40 per month in 2010 just to maintain his or her 2000 buying power.
"Some of the biggest increases in costs are in categories that seniors spend the largest portion of their incomes. They are expenses for which consumers have few other options, like housing, energy, and medical costs," says Daniel O'Connell, chairman of TSCL.
"The fact (SSI) recipients have seen their buying power diminish doesn't surprise me," Area Agency on Aging Executive Director Kay Hind said, "but seeing the actual numbers does surprise me. I did not realize the gap had grown that large."
The number's alarmed O'Connell.
"This study highlights the risk facing the majority of seniors today," O'Connell said. "More than 60 percent depend on Social Security for at least half of their income."
"Yet as seniors live longer, their benefit becomes less adequate to cover their expenses."
Myrtis Mulkey-Ndawula, CEO of the Southwest Georgia Community Action Council, says "the lack of a COLA in January was not a lot of money, but when you are on a fixed income and a tight budget, it's noticed. We had more people apply and qualify for our Low Income Home Energy Assistance Program this past winter.
"But we're helping a lot of people setting up budgets to make it through.
To help protect the buying power of benefits, TSCL is lobbying for a change in the Consumer Price Index used to determine the annual COLA.
Currently the COLA is calculated using an index that excludes the costs of seniors 62 and over, and instead tracks the spending habits of younger workers who don't spend as much of their incomes on healthcare costs.
The Seniors Citizens League believes seniors would receive a more fair and adequate COLA using a "senior index" like the government's CPI for Elderly Consumers or the CPI-E.
According to TSCL, if the government had used the CPI-E to calculate annual COLAs, a senior who retired with an average benefit of $460 in 1984 would have received $12,856 more in Social Security benefits over the past 26 years.