An analysis of Social Security “cost of living adjustments” (COLAs) compared to the actual costs of goods and services purchased by older Americans found that Social Security benefits have lost 30 percent of their buying power since 2000. That’s according to a study released earlier this month by The Senior Citizens League (TSCL).
“To put it in perspective,” says study author Mary Johnson, “for every $100 worth of groceries a retiree could afford in 2000, they can only buy $70 worth today.”
Between January 2000 and January 2020, Social Security COLAs increased Social Security benefits by 53 percent, but the costs of goods and services purchased by typical retirees rose almost twice as much — 99.3 percent. Medicare premiums and out-of-pocket costs, housing, and homeowner’s insurance— were among the most rapidly – rising costs over the past year.
- The average out-of-pocket cost of prescription drugs jumped from $1,102 a year in 2000 to $3,875.76 this year, a 252% increase;
- Medicare Part B covers services such as doctor visits and preventive care. But the cost of the standard Medicare Part B premium has more than tripled in the past two decades, rising from $45.50 a month to $144.60 a month, an increase of 218 percent;
- The average annual cost of homeowners insurance across the U.S. has increased from $508 in 2000 to $1,389.90 this year — or 174 percent; and
- The average cost of heating oil has increased from $1.15 a gallon in 2000 to $3.12 now, an increase of 172 percent.
In 2019, beneficiaries received a modest three percent COLA, but only 1.6 percent in 2020. To help protect the buying power of benefits, TSCL supports legislation that would provide a modest boost in benefits and base COLAs on the Consumer Price Index for the Elderly (CPI-E) or guarantee a COLA no lower than 3 percent.