As people are able to live longer and longer, our years in retirement entail a much longer time period as well as require significantly more financial support. Fox Business writes about how aging Americans are losing their buying power as they have lost almost one-third of their consumer power since 2000, according to a new survey conducted by The Senior Citizens League (TSCL). This bodes a negative effect for the U.S. economy, since nearly two-thirds of our nation’s economic growth is made up of consumer spending. The Senior Citizens League emphasizes that these results are the same as last year, highlighting that there is no progress in the buying power of Social Security benefits which can strain living costs for older citizens.
Of the 37 million Americans who are ages 65 and over, namely Baby Boomers, and who receive a Social Security check, one in three rely on the government program for 90% or more of their total income. The majority of beneficiaries depend on it for at least 50% of their total income. But as retirements may last 30 years or more, it is crucial to make these retirement savings last. As costs rise faster than Social Security benefits, seniors must delve deeper into savings. Mary Johnson, a Social Security policy analyst for TSCL, warns that the cost of basically all goods and services purchased by seniors rises over time. Johnson states, “To cope, boomers should aim to live beneath their means: Less now will mean more later.”
With an increase in costs, Social Security benefits have lost 31% of their buying power since 2000. Seniors have been receiving slight increases to their benefits which are intended to enhance their buying power. However, since 2000, typical senior expenses have skyrocketed 84% while the Social Security cost-of-living adjustment (COLA) has increased benefits by 41%, only half as fast. Given the rise in costs and the inability of Social Security benefits to adjust, it is imperative that seniors going into retirement anticipate and plan budgets in order to make their savings endure throughout retirement.
Tags: baby boomers, cost-of-living adjustment, mary johnson, social security, the senior citizens league
