Majority of Seniors Report That Expenses Rising Six Times Faster Than Soc Security
Monthly household expenses of seniors increased up to six times faster than their Social Security benefits between January of 2013 and January of 2014, according to a new survey by The Senior Citizens League (TSCL). Sixty-five percent of respondents said the 2014 cost-of-living adjustment (COLA) raised their monthly benefits by less than $19.00. Yet a significantly larger portion of survey respondents — 92 percent — said that their total monthly expenses rose by at least $39.10 per month over the same period. Of total respondents, 50 percent reported that their monthly expenses had gone up by more than $119.00 — more than six times the amount of their COLA increase.
“When expenses rise at disproportionately faster rates than benefits, seniors spend through retirement savings, and exhaust home equity and other resources far more quickly than planned,” says Ed Cates, TSCL Chairman. “Because Social Security COLAs are doing such a poor job of protecting seniors from rising costs, many retirees are caught unprepared. Even seniors who thought they were “comfortably well off” going into retirement, can be forced to reduce their standard of living, or continue to work far longer than they ever thought they would,” Cates says.
Healthcare costs are a source of considerable concern. According to the survey, 67 percent of seniors reported that healthcare costs took up to one-third of their Social Security payments. Another 21 percent of seniors reported spending up to one-half of their Social Security benefits on health care. “Considering that Social Security accounts for 50 percent or more of income for the majority of seniors , spending on healthcare costs accounts for a significant share of the total budget for most seniors,” Cates points out.
Earlier this year, the Centers for Medicare and Medicaid Services said that healthcare costs have been rising at the slowest rates on record. “While that’s welcome news, the survey results suggest that seniors have not noticed that improvement in their budgets,” Cates says. “Aging and changing health can mean hundreds, if not thousands, of dollars in increased spending for many senior households, even when healthcare cost increases are extremely low,” Cates explains. “Other costs, such as gasoline, home heating fuels, and food costs, have steeply increased over the past year as well,” Cates adds.
The TSCL survey found that to cut spending on healthcare costs, seniors believe Congress should ramp up anti-fraud efforts, and promote better integration of care to reduce duplication of tests, expensive imaging and unnecessary services. TSCL estimates fraud and waste are costing the average senior an extra $305.00 in 2014 in higher premiums.
To learn more about the COLA and rising senior costs, visit TSCL’s website at www.SeniorsLeague.org.