Social Security was designed to help seniors continue with some monthly income after retirement by contributing during their working years. While the plan seemed plausible, and has certainly helped many a retiree, few people realized back in the 30’s how other factors would affect the program.
Those that only a few years ago were able to survive on their Social Security checks, and possibly a pension, are now struggling due to the ever increasing inflation. Food, gasoline, and utility costs have skyrocketed in the past decade, while Social Security benefits, based on the estimated increase in cost of living, have increased since 1991 by anywhere from 1.3% to 5.8%. In 2009 and 2010, no new increases were implemented, so the cost of living increase, or COLA, will be calculated from the 2008, which is used as the base. Increases are determined by a national average, and the Social Security Administration points out that this does not necessarily reflect increases in specific areas, where property taxes, sales taxes, and other expenses may have increased to a greater extent.
Needless to say, a lot of changes have taken place in the economy since 2008. Food and gas prices have, in many instances, nearly doubled. Utility costs, home maintenance, and basic services have increased dramatically. Seniors that were primarily relying on their monthly checks to get them through from month to month are finding that it doesn’t go nearly as far as it once did, and changes are being made to their lifestyles, and in some cases, their very existence. Many people will argue that Social Security benefits were not designed to be the only source of income in retirement, however, for those that were self employed, or worked for a company that did not provide retirement benefits, these monthly checks are vital.
Seniors are dealing with this dilemma in various ways, including cutting back on all unnecessary expenses and recreational activities, and keeping a tighter budget where food costs are concerned. They may also be downsizing and trading in their larger homes, or moving to areas that are less expensive where taxes and utilities are concerned. Many retirees are getting back into the workforce, if they can, taking whatever jobs are available.
If the current trend in the nation’s economic status is any indication, retirees may be downsizing even more in the next few years, and lifestyles will change drastically.