President Obama's Call for $250 One-Time Payment Would Cover Just Two Percent of Lost Income
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WASHINGTON, Oct. 14 /PRNewswire-USNewswire/ -- Tomorrow morning the Social Security Administration is expected to announce that seniors will receive no Cost of Living Adjustment (COLA) in their Social Security checks next year.
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President Obama's call late this afternoon for Congress to pass a one-time payment of $250 for seniors would make up just a tiny fraction of the amount seniors will lose throughout their retirement.
A senior retiring in 2009 with average benefits would lose $10,134 over the course of a 20-year retirement, due to the loss of the compounding effect of an average annual benefit increase of three percent, according to a recent analysis by The Senior Citizens League (TSCL).
PROBLEM
- The Congressional Budget Office (CBO) also forecasts a zero COLA for 2011. If there is no COLA for both years, a senior retiring in 2009 with average benefits would lose $20,144.
- Although the COLA is intended to help seniors keep up with inflation, a recent study by TSCL that analyzed 20 key expenditures found that people 65 and over have lost 20 percent of their buying power since 2000.
- Common senior expenses have soared since the beginning of the decade, such as Medicare Part B premiums (up 112 percent), heating oil (up 96 percent), and a dozen eggs (up 99 percent).
- Almost 70 percent of beneficiaries depend on Social Security for 50 percent or more of their income. Social Security is the sole source of income for 15 percent of beneficiaries.
- The Emergency COLA Bill (H.R. 3557), introduced last month by Congressman Walter Jones (NC) and encouraged and promoted by TSCL from the beginning, would provide a COLA for 2010 equal to the average of the COLA over the past ten years. That average is roughly three percent.
- The bill would give the average beneficiary an additional $415.20 in Social Security payments in 2010, a boost of $34.60 per month.
- More importantly, the bill prevents seniors from losing the compounding effect of a COLA increase, which could result in thousands of dollars more throughout retirement for millions of seniors.
- In June, The Senior Citizens League (TSCL) became the first national group to call for an Emergency COLA for 2010.
Daniel O'Connell, Chairman, The Senior Citizens League:
"With inflation rising faster than the COLA, it's no surprise that more seniors are slipping into poverty than ever before. Since millions of seniors are desperate for an Emergency COLA next year, we encourage all seniors to contact their Members of Congress immediately."
Shannon Benton, Executive Director, The Senior Citizens League:
"Although President Obama's call for a one-time payment of $250 will help seniors, it is not nearly enough to compensate for the rising costs seniors have been enduring for years. Today, a senior can buy just 80 percent of what they could have afforded at the beginning of the decade – and $250 does not address that terrible trend in an effective manner."
With 1.2 million supporters, The Senior Citizens League (www.SeniorsLeague.org) is one of the nation's largest nonpartisan seniors groups. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association.
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Shannon Benton
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SOURCE The Senior Citizens League
