The Social Security Administration announced on Thursday that benefits will increase by 1.6% in 2020, which senior advocacy groups say is not enough to keep up with the rising costs of goods and services.
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“Social Security’s annual COLA amount typically does not keep pace with all the increases in living expenses that most seniors face, including the costs of housing, food, transportation and, especially, health care and prescription drugs,” AARP CEO Jo Ann Jenkins said in a statement referring to cost of living adjustments.
She added retail drug prices have increased faster than inflation for at least 12 years, which adds to the burden of people who rely on Social Security.
For a recipient earning $1,461, the average monthly benefit, checks will increase by about $23.54 per month.
The Senior Citizen’s League said the 1.6% increase in 2020 continues a “worrisome trend” where the cost of living adjustments has averaged 1.4% from 2000 to 2010.
“When a retiree’s costs rise faster than their COLA, the buying power of Social Security benefits erodes, leaving people with a benefit that doesn’t go as far as it did when they first retired,” Mary Johnson, a Social Security policy analyst for The Senior Citizens League, said in a statement. “People who have been retired for 10 years or longer have absorbed the full financial blow of low COLAs.”
According to Johnson, Social Security benefits lost a total of $15,258 in financial growth from 2010 to 2019 when compared with the previous decade. Checks in 2019 are as much as 18% lower due to the impact of "extremely low COLAs" over the past decade.
Overall, the group says Social Security benefits have lost 33 % of their buying power since 2000.
The cost of living adjustment for 2018 was 2%, but it was largely perceived to be offset by increases in Medicare costs.
There was a 0.3% increase in 2017 and no adjustment the year prior.
The benefit increase will begin for Social Security beneficiaries in January and for Supplement Security Income recipients on Dec. 31.