Social Security Benefits Have Lost One-Third of Their Purchasing Power Since 2000

Those who have started taking Social Security since 2000 have lost a third of their purchasing power, pushing many into poverty

Image Credits: 401(K) 2012 / Flickr.

The latest survey from the Senior Citizens League (SCL) revealed that Social Security, the welfare program originally designed to help workers in their old age, is instead slowly impoverishing them:

Over the past 18 years, Social Security benefits have lost 34 percent of their buying power, according to the findings of this study.

Many of the goods and services purchased by typical retirees increased several times faster than annual Social Security cost of living adjustments (COLAs) from January 2000 through January 2018.

As The New American recently pointed out, for three out of every five of the more than 60 million Americans receiving Social Security, that monthly check represents half or more of their total monthly income. Because many have not planned for the future, or been able to, by the time workers start receiving their benefits, four out of 10 will be living at or near the poverty level.

There have been previous attempts to “adjust” the purchasing power of those checks including using cost-of-living-adjustments or COLAs. For 2019 those 62 million Social Security recipients will see their checks increase by 2.8 percent.

But since 2000 those COLAs have fallen far behind the real costs of living by those over 65. Said the SCL: “Since 2000, COLAs have increased Social Security benefits a total of just 46 percent, while typical senior expenses grew more than twice as quickly — 96.3 percent.” For example, a homeowner heating his or her home with heating oil has taken a terrible beating. In January 2000 he or she would have paid $575 to fill a 500-gallon tank, while Social Security was paying an average of $845 a month. But fast forward to 2018: filling that tank now costs more than $1,600 while Social Security paid an average of $1,200. That’s a shift in costs that moves that homeowner from a “plus” $275 a month (after paying for heat) to a “minus” $400 a month — a negative shift of nearly $700 a month.

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