Social Security Cuts Have A Big Impact On The Senior Community
Posted on 12. Oct, 2010 by Aaron Yeagle in Senior News
Seniors prepared to cut back on everything from food to charitable donations as word spread Monday that they will have to wait until at least 2012 to see their Social Security checks increase.
The government is expected to announce this week that more than 58 million Social Security recipients will go through a second straight year without an increase in monthly benefits. This year was the first without an increase since automatic adjustments for inflation started in 1975.
As we discussed in an article last week about the likely impending doom of Oregon Project Independence, government-funded programs are still feeling the effects of a recession that started now more than 2 years ago.
Cost-of-living adjustments are automatically set by a measure adopted by Congress in the 1970s that orders raises based on the Consumer Price Index, which measures inflation. Social Security benefits will remain unchanged as long as consumer prices remain below the level they were at in 2008, the last time a COLA was awarded.
While this makes sense at the surface, it remains to have an impact on the millions of seniors who live in communities where businesses still inflate prices to keep revenue up.
More than 58.7 million people rely on Social Security checks that average $1,072 monthly. It was the primary source of income for 64 percent of retirees who got benefits in 2008; one-third relied on Social Security for at least 90 percent of their income. For seniors who mapped out their retirement funds years ago – including expecting the annual inflation adjustments – their financial future may remain in limbo. This is primarily due to the rising cost of the healthcare and that Medicare does not cover all of one’s healthcare costs. Copays, out-of-pocket limits, and medication are healthcare bills seniors must continue to budget for.
And this is just for general healthcare. What happens when seniors must decide to receive in home care from a caregiver to stay at home or move into a community or facility? Many in home care costs are paid privately – just like a move into a facility. The social security crisis is a difficult road for seniors to navigate, and we are just in the middle of the issue.