Social Security payments to be frozen
Senior citizens and others who count on income from Social Security most likely won't get a cost-of-living adjustment in 2010 because the recession has put the brakes on inflation. But for many, the cost of living is still going up. Tamara Keith reports.
The upper left-hand corner of a Social Security card (iStockPhoto.com)
More on Retirement - Saving, Fed. Budget/Govt. Spending
TEXT OF STORY
Kai Ryssdal: Senior citizens and others who get Social Security checks have come to count on something called a COLA. A Cost of Living Adjustment. A yearly bump in their checks tied to inflation. Come January, though, the COLA will be decidedly flat, since the recession has put the brakes on inflation. But Tamara Keith reports from Washington, not everybody measures their cost of living the same way.
TAMARA KEITH: Social Security payments to seniors normally increase a little bit every year. In 2010, the Social Security trustees project there will be no increase at all.
That's because Social Security payments are tied to the Consumer Price Index. And that's down from where it was last year, in part because of the dramatic drop in gas prices. But 67-year-old Barbara LaBelle says her cost of living hasn't come down. Take her medical expenses.
BARBARA LABELLE: They've raised my co-pays and now I pay for lab work which I didn't have to pay before. So as many doctors as I'm seeing, I'm shelling out high co-pays.
Her experience points to a problem many seniors face. Health-care costs are rising a lot faster than the rate of inflation. Cristina Martin Firvida is with AARP.
Cristina Martin: They count on that cost of living increase to help them meet those health-care expenses that continue to rise each and every year.
So advocates are pushing Congress to help seniors out with a cost of living adjustment or COLA anyway. Sandy Wise is with the National Committee to Preserve Social Security and Medicare. Here's what the committee wants.
SANDY WISE: Give either some kind of modest COLA increase to help people out in this situation. Or just a flat payment, a one-time payment, to compensate them for the lack of a COLA.
Barbara LaBelle's only source of income is her $900 a month Social Security check. And she'd love to get a raise, one way or another.
In Washington, I'm Tamara Keith for Marketplace.
Comments
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From Boca Raton, FL, 08/29/2009
How dare you say that the inflation rate is at 0 where do you people live?Our government should be ashamed of themselves after they pass law's to help many countries with BILLIONS of dollars they have the audacity to turn their backs on the backbone of our country the SENIORS.However they do what they want Two U.S Senators willbe retiring soon one from Florida and the other from Illinois,one with Three years and the other with one year service, but both will receive HEALTHY PENSIONS and MEDICAL COVERAGE for the rest of their lives thats the AMERICAN WAY where is the JUSTICE?One remedy would be to close the POST OFFICE they are going to lose SEVEN BILLION DOLLARS this [they are admitting to it could be much more],split the Post Office up between FED EXP. and U.P.S. save that money plus all the pay checks which result in TENS of Billions of Dollars, then they could fund SOCIAL SECURITY and other budgets that come up short.However if the U.S. Senate and Congress give up their raises in the coming years then I would be willing to give up mine,that would be highly unlikely,they make law's for themselves ,and they forget about the SENIORS who are on a FIXED BUDGET. God Bless America we need it.
From Syracuse, NY, 08/25/2009
The cost of groceries, utilities in my area have all gone up. I am a customer of National Grid and because less energy was being used the company increased the delivery charges. Inflation has nothing to do with the real facts. Our cost of living has increased. Many seniors are hard pressed now and the light at the end of the tunnel (COLA) is getting dimmer and dimmer.
From Austin, TX, 08/24/2009
I find it very concerning that people go their whole lives, then end up having to live solely on social security. With the huge national debt and the explosion of unfunded entitlements, people in the not to distant future are going to get hit with reality. If all you are counting on is the government to take care of you, I don't think you'll be able to retire with much dignity. People must learn to live beneath their means now and save for tomorrow. It may be hard. You may not be able to buy everything you need, but in the long run, you will be better off.
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