Social Security Payments Lost One-Third of Spending Power Since 2000

By:
Chris Gaetano
Published Date:
Jun 22, 2018
Inflation

A recent report says that Social Security payments don't go nearly as far as they used to, having lost about 34 percent of their buying power since the year 2000, according to CNBC. The report, which came from the Senior Citizens League, said that this is because the cost of goods and services that retirees commonly use have risen faster than the cost-of-living adjustments that are meant to mitigate these increases. While these adjustments have increased Social Security payouts by 46 percent since the year 2000, average retiree expenses have increased by 96.3 percent in the same time. 

This disparity has arisen because cost-of-living adjustments are based on the Consumer Price Index, which tracks general inflation throughout the economy. However, the CPI is an average, and there are many costs that don't just outpace the CPI but leave it in the dust. Since the year 2000, for instance, the report notes that Medicare Part B monthly premiums have increased by 195 percent, out-of-pocket prescription drug costs have increase by 188 percent, home heating costs have increased by 181 percent, Medigap coverage has increased by158 percent, propane gas has increased by 157 percent and real estate taxes have increased by 129 percent. 

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