Inflation has eroded more than one-third of the purchasing power of Social Security benefits since 2000, according to a new study.
According to The Senior Citizens League, those who retired before 2000 saw the purchase value of their Social Security benefits plummet by 36%. To keep the same purchasing power as in 2000, these people would need an approximately $517 increase in monthly benefits.
Seniors and people with disabilities, many of whom live on fixed incomes and heavily rely on their monthly Social Security payments, are struggling because, although Social Security recipients receive an annual cost-of-living adjustment, increases have not kept up with inflation for years.
in January of this year, the monthly Social Security benefits received by millions of senior citizens and disabled people increased. The 8.7% rise in payments was the largest since the 1980s and was intended to help mitigate the increasing inflation that would otherwise reduce recipients’ purchasing power. According to the Social Security Administration, monthly Social Security benefits increased by more than $140 on average in January.
Inflation has been declining over the last ten months. As a result, the cost of living adjustment in 2024 is likely to be lower than in previous years. It won’t be announced until October, but the annual increase would be 3.1% based on current inflation rates, according to Mary Johnson, the league’s Social Security and Medicare policy expert.
Prices rose 0.4% from March to April, the government said on May 10, up from 0.1% from February to March. Food prices rose 7.7% between April 2022 and April 2023, according to the most recent consumer price index (CPI) report from the Bureau of Labor Statistics.
Many foods have become more expensive. The cost consumers pay for a dozen big, Grade A eggs increased 30% from $2.52 in April 2022 to $3.27 in April 2023, according to statistics from the U.S. Bureau of Labor Statistics.
Yogurt prices in the United States jumped 18% in the first quarter of 2023, according to the most recent economic study conducted by the Catalina Shopping Basket Index. The category of frozen food saw the next-largest increase, at 17%, while frozen veggies in particular saw a 16% increase.
For people with disabilities and chronic illnesses, it can be even more expensive to live. According to the National Disability Institute, researchers estimate that households containing an adult with a disability require, on average, 28 percent more income (or an additional $17,690 a year for a family at the median income level) to obtain the same standard of living as a comparable household without a member with a disability.
Wheelchairs, walkers wheelchair-accessible vans, prescriptions, bath and shower chairs, enteral formula, and hearing aids are just some of the things that are necessary for disabled people. Some of these expenses are covered by health insurance, but not always.
Millions of Americans need more than just an annual raise in their Social Security benefits. People shouldn’t struggle to afford necessities such as food and housing. Social Security benefits must provide a livable income for the people who need them most in our country.
Goodman, Nanette, et al. “The Extra Costs of Living with a Disability in the U.S. — Resetting the Policy Table.” National Disability Institute, Oct. 2020, http://www.nationaldisabilityinstitute.org/wp-content/uploads/2020/10/extra-costs-living-with-disability-brief.pdf. Helhoski, Anna. “The Cost of Groceries: Are Food Prices Going Up?” NerdWallet, 10 May 2023, http://www.nerdwallet.com/article/finance/price-of-food.
Luhby, Tami. “Social Security Benefits Have Lost 36% of Buying Power since 2000 .” CNN, 10 May 2023, http://www.cnn.com/2023/05/10/politics/social-security-benefits-inflation/index.html.
Parks, Betsy. “Yogurt and Frozen Foods Are the Latest Victims of Inflation.” The Daily Meal, 12 May 2023, http://www.thedailymeal.com/1284743/yogurt-frozen-foods-latest-victims-inflation/.
Rugaber, Christopher. “Prices Increased in April after Months of Declines as Inflation Remains Stubborn despite the Fed’s Best Efforts.” Fortune, 10 May 2023, fortune.com/2023/05/10/cpi-april-increase-inflation/.
Smith, Cara. “Why Are Eggs so Expensive?” NerdWallet, 10 May 2023, http://www.nerdwallet.com/article/finance/why-are-eggs-so-expensive.
Tanner, Jeremy. “Social Security 2023: Here’s When the 8.7% Increase in Benefits Kicks In.” The Hill, 16 Dec. 2022, https://thehill.com/homenews/3772643-social-security-2023-heres-when-the-8-7-increase-in-benefits-kicks-in/.