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Social Security Increase May Not Be Enough for Some
The Dallas Morning News
October 15, 2005
Daphne Hodges, 69, of Dallas doesn't want to appear ungrateful, but she doesn't think next year's 4.1 percent increase in Social Security benefits will help her make ends meet.
"I know that Social Security says it's the largest increase in more than a decade, but for me it means only another $30 a month," she said. "That doesn't begin to pay my bills."
The Social Security Administration announced the annual cost-of-living adjustment for 52 million Americans on Friday, saying the average beneficiary will receive an extra $39 monthly starting in January.
The average individual check will increase from $963 to $1,002. The average check for a retired couple on Social Security will go from $1,583 to $1,648.
The increase is the biggest since a 5.4 percent gain in 1991.
Monthly Social Security checks have been adjusted automatically since 1975 to protect retirees' income from inflation. The adjustment is based on the rise in the government's consumer price index from the third quarter of the previous year through the third quarter of the current year.
Some advocates for Dallas area seniors called the larger checks a godsend for older adults living on limited incomes.
"I'm elated," said Trini Garza, executive director of La Voz del Anciano, which serves older Hispanics in Dallas. "This is going to make a difference in people's lives."
But the trigger for the extra cash is rising prices, and most local senior advocates say that it won't offset the sharply higher costs for health care and utilities.
"It's not enough," said Ester Davis, chairwoman of the city of Dallas' Senior Affairs Commission. "It's little better than crumbs for a generation that's been called 'the greatest.'"
About a fourth of the average Social Security increase will be eaten up next year by the $10.30 monthly increase in the Medicare premium for doctors' services.
Older Americans who sign up for Medicare's new prescription drug benefit next year will pay another premium averaging about $32 a month, though their out-of-pocket drug expenses should fall.
"A 4.1 percent increase in Social Security checks would be welcome in more stable economic times, but it's not going to cover the large increases we've seen in health care expenses," said Carole Barasch, communications director for AARP Texas.
Older adults also will be facing sharply higher energy bills this winter, senior advocates said.
"Every increase in Social Security benefits helps someone on a fixed income," said Molly Bogen, executive director of the Senior Source of Dallas. "But it won't cover the huge utility cost increases announced in recent weeks."
Social Security has become the only source of income for about a fifth of the Senior Source's 40,000 clients, she said.
Older adults and their advocates have long complained about surging medical inflation, which has far outstripped other price increases. But this year's spike in energy prices has added fresh urgency to their concerns, especially for seniors on fixed incomes.
As a result, many older adults are finding themselves deeper in debt or teetering on the edge, with their dignity damaged even if their credit isn't.
"These are the people who are at risk of facing an unexpected expense that will force them to choose between paying their rent and buying their groceries," said Michael Fleisher, executive director of Jewish Family Service in Dallas.
"Is that the quality of life we want for our parents or ourselves?" he asked.
The complaints by senior advocates about this year's increase highlight Washington's ongoing discussions about how Social Security computes cost-of-living adjustments.
Some lawmakers call for a price index specially tailored to older adults, asserting that the current calculations don't properly account for seniors' outsized health-care costs. Critics dismiss that idea as an unaffordable luxury that would only exacerbate Social Security's long-term financing problems.
Thelma Williams, 70, of Dallas, said she's satisfied with this year's increase -- which will mean an extra $33 a month for her.
"It's the first decent increase in the seven years I've gotten Social Security," she said. "Maybe now I can afford to indulge myself every now and then."
But for other seniors like Ms. Hodges of Dallas, who lives only on her Social Security check of $722 a month, Friday's announcement was a glass half-empty.
"That 4.1 percent increase won't solve my problems," she said.
Ms. Hodges said she's cut her living expenses wherever possible, by switching electric companies and changing her supplemental health insurance, but her living costs still exceed her income.
The senior, who returned to college in her 60s to earn a degree in gerontology, has been looking for a job with a retirement community for months, but her interviews haven't brought any offers.
"I'm drawing money out of my savings account to pay my bills, but that can't go on forever," she said. "What will I do if my health declines and I need that safety net?"
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