Small increase squeezes elderly

For many seniors, the advice “don’t spend it all in one place” probably won’t fit when it comes to the small rise in their Social Security benefits in 2008.

The federal government announced Wednesday that Social Security benefits will increase 2.3 percent — the smallest amount in four years — starting in January. That means an additional $24 per month for an individual or $39 for a couple.

According to the Census Bureau’s American Community Survey, annual household Social Security income in Blair County in 2006 was $13,774, about $100 less than the national average. About one-third of Blair County households receive Social Security.

Given the way the prices of food and other goods have risen, the small benefit increase means many seniors will have to dig deeper into their savings to maintain their standard of living.

The Social Security cost-of-living increase is determined based on the year-over-year change in the Consumer Price Index for the July to September quarter. Analysts say lower energy prices over the summer kept down this year’s increase.

But as most everyone knows, those lower prices aren’t expected to linger. Oil prices have been hitting records. This indicates prices for gasoline and home heating oil will be going higher, and they’re not exactly cheap now.

The Energy Department this month reported that average winter heating costs are expected to increase 22 percent for heating oil and 10 percent for natural gas. Those are the fuels used for heating the majority of homes in central Pennsylvania, including more than eight out of 10 homes in Blair and Cambria counties, according to the 2000 Census.

If there is a glimmer of good news amid all this gloom, elderly Americans are facing only a small increase in the Medicare Part B premiums. The federal government announced last month that Part B premiums, which cover things like doctor’s office visits, will increase $2.90 per month to $96.40 next year.

Still it’s clear many elderly Americans won’t be living on easy street in 2008. And given the financial crisis looming in a few decades for the Social Security system, that seems unlikely to change. Seniors will have to cope with the financial squeeze to the best of their abilities.

This should serve as a lesson to current workers to be serious about saving money for their retirement.

The problems today’s elderly are facing with Social Security not keeping pace with costs are likely to be amplified for tomorrow’s retirees.

As most elderly Americans can attest, the pinch caused when costs rise more than Social Security benefits is painful and inescapable.