WASHINGTON – Social Security checks are going up $63 a month for the typical retiree – the largest increase in more than a quarter century but likely to seem puny to the millions who have been watching in horror as Wall Street lays waste to their retirement nest eggs.
Every little bit helps, but the boost is coming after a year when people living on fixed incomes have been pounded by surging energy prices and higher food costs – and lately have seen their lifetime savings shrivel along with the stock market.
The yearly adjustment in Social Security checks is linked to government inflation figures, but advocacy groups for seniors say it’s far short of what the typical retiree needs to keep up with rising living costs.
The Senior Citizens League said it did a study that indicated people 65 and over have lost 51 percent of their buying power since 2000, with the price of home heating oil and gasoline more than doubling since the beginning of the decade and such food staples as eggs and potatoes showing big increases as well.
“Although the word crisis gets thrown around a lot in our national dialogue, there’s no other word to describe it. Millions of our nation’s seniors are facing an economic crisis,” said Daniel O’Connell, the league’s chairman.
Adds Mark Zandi, chief economist at Moody’s Economy.com: “Most households will take any cash they can get in these very difficult times when seniors have been panicked watching the fall in stock prices and what is happening to banks where many of them have their CDs.”
The 5.8 percent increase announced Thursday by the Social Security Administration will go to the 50 million Americans receiving benefits. It is the biggest jump since the 7.4 percent of 1982. The $63 typical monthly increase compares to the $24 advance that retirees saw in this year’s benefit checks, an increase of just 2.3 percent and the smallest in four years.
The typical retiree’s monthly check will go from $1,090 to $1,153.
The upcoming help for the retirees should help the faltering economy as well, assuming they spend much or all of the additional money.
“It gives people a little extra spending power that they can take to the shopping mall,” said David Wyss, chief economist at Standard & Poor’s Corp.