July 24–Social Security recipients had better be ready to taste the un-COLA — not the soft drink, but a likely zero Cost of Living Adjustment (COLA) for Social Security benefits in 2016.
It would mark only the third time that’s happened since 1975. The verdict isn’t final but looking quite probable in a year of sharply lower energy prices and low inflation generally.
That can be good news for taxpayers, and in theory, seniors too — if their actual living expenses don’t go up. But many say they’re facing increasing bills such as out-of-pocket medical costs that don’t necessarily play along with the low-inflation storyline they are supposed to be enjoying.
“The COLA is staying the same, but the cost of living is going up,” said Barbara Smith, 80, of Lake Worth. “I’m livid.”
Gas prices have remained low, but prices for some food items have spiked. Example: The U.S. Department of Labor reported that the price of eggs increased by 84.5 percent from May to June amid bird flu concerns — the largest single-month jump since 1937.
A report in April by credit-information provider TransUnion found out-of-pocket medical costs for patients rose 11 percent during 2014.
The good news is Social Security’s retirment trust fund has enough money to pay full benefits until 2035, a year later than past projections, a report from the progam’s trustees this week showed.
But the part of Social Security that pays disability benefits could run out of money next year.
“While the Trustees once again report that the combined Old Age, Survivor and Disability Insurance Trust can pay full retirement, survivor and disability benefits for approximately two more decades, we know that if no action is taken, benefits will be cut by nearly 25 percent in 2034,” said AARP Chief Executive Officer Jo Ann Jenkins.
As political campaign season gets underway, “we will be urging all presidential candidates to share their plans for the long term solvency and adequacy of Social Security,” Jenkins said.
A lot of people, including many in Palm Beach County, rely heavily on Social Security to make ends meet. The average monthly benefit nationally is $1,220.
More than 22 percent of Palm Beach County’s 1.4 million residents are older than 65, compared to less than 19 percent statewide and about 14 percent nationally.
Social security “”only lasts me two weeks (each month), then it runs out,” said Palm Beach County resident Francisco Perez, 79. “I don’t know what I’ll do next year.”
Palm Beach Post Staff Writer Rex Bone contributed to this story.
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