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Social Security Benefits to See Biggest Increase in 26 Years
October 25, 2008
Many seniors struggle to make ends meet each month and live primarily on Social Security. For those people, there is some good news!
For those people who receive Social Security, they can expect their benefits to increase 5.8% next year - which according to the Social Security Administration is the largest Cost-of-Living Adjustment (COLA) since 1982. As a result of this increase, the average monthly payment to retirees will rise to $1,153 from $1,090.
This is good news for seniors, but not all of the news is good. Inflation is real and this means that although the COLA increase is the largest since 1982, items seniors need to purchase also went up -- often more than the COLA.
For example, the cost of Medicare Part B premiums tend to rise faster than the COLA, so on balance, the increase may feel like a decrease to seniors.
Seniors are also dealing with higher costs for food, heat, and health care, among other things. Food and beverage prices have jumped an average of 5.9% over the past year. And the American Gas Association says people who heat their homes with natural gas could see their heating bills increase as much as 30% this winter compared with last year.
But the primary reason many seniors have a tough time keeping up with their bills still remains the cost of medical expenses. According to the Bureau of Labor Statistics, medical costs rose 269% from December 1982 to December 2007, while inflation for other goods and services rose 115%.
So although the COLA increase is a positive thing for seniors, when you look a little deeper you will find that many seniors will still struggle to make ends meet each month as the "cost of living" goes even higher than the cost-of-living-adjustment.
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