Friday, October 19, 2007

COLA Can't Keep Up

The Social Security Administration has announced a 2.3% cost of living adjustment for the more than 50 million Americans receiving Social Security in 2008. This adds about $24.00 to the average monthly Social Security check of $1,055 and is the lowest increase in four years.

“Rising healthcare costs, including Medicare Part B premiums and prescription drug costs, have outpaced Social Security cost-of-living increases for years. Part B premiums alone have more than doubled since 2000. Combine that with high energy and food costs and you can see why seniors are feeling the pinch.

COLA’s are critically important to help seniors maintain a basic standard of living. However, as long as we continue to ignore the need for system-wide healthcare reform, Social Security COLA increases will continue to fall short for America’s seniors, disabled and their families”. Barbara B. Kennelly, President/CEO

We’re thankful to have a Social Security system that has any cost of living increases at all – most private pensions don’t, and buying inflation adjusted annuities with your savings is one of the most expensive retirement products around.

But the reality of this cost-of-living increase is that come January, beneficiaries will likely see it all spent and then some. The Arizona Republic summarized the dollars and cents realities of living on a fixed income. Our fall Newsletter also looks at how rising healthcare costs are eating away at the COLA.

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