WASHINGTON, Aug. 24, 2021 /PRNewswire-PRWeb/ -- As inflation continues to steeply increase prices, older consumers are reporting that food has been the fastest growing category of their household budgets so far this year, according to a new survey by The Senior Citizens League (TSCL). The same survey also found that nearly one out of five survey respondents, 19 percent, say they have visited a food pantry or applied for food stamps (SNAP) since the beginning of this year," says Mary Johnson, Social Security policy analyst for The Senior Citizens League.
"It's highly disturbing that such a large number of survey participants have been forced to access food pantries," Johnson says. "This illustrates the dire situation faced by households of those who depend on Social Security for most of their income when food prices jump into overdrive," she says. "Over the past 12 months, the price of bacon is up 11 percent, beef up 10.6 percent and fresh fish up 8.5 percent" Johnson notes.
This is not a sustainable spending pattern for retired and disabled households. In recent years, Social Security recipients more typically reported that housing and medical expenses, not food, increased the fastest and were the two top cost concerns.
Survey participants were asked: "Since the start of 2021, which of the following budget categories increased fastest in your household?"
Fastest Growing Costs of Older Households Since Beginning of 2021
- Housing (rent or costs associated with owning, repairs and maintenance)/24%
- Other /3%
Source: The Senior Citizens League, 2021 Retirement Survey, 650 responses
When asked how they responded to rising prices for meat, poultry, seafood, and dairy products, survey participants report reducing the amount that they consume of these foods and having to spend a larger portion of their budget on these items. "Most troubling of all, about 25 percent of survey participants reported they've gone without," Johnson says.
But the hyper - inflation of 2021also means that Social Security recipients are likely to see the highest cost-of-living adjustment (COLA) in almost four decades. Johnson estimates that the Social Security COLA payable in 2022 will be about 6.2 percent if the current trends continue. "That's a huge boost, coming after COLAs have averaged a meager 1.4 percent over the past 12 years," Johnson notes.
However, concern is growing that the Medicare Part B premium increase, which the Social Security Administration deducts directly from Social Security benefits, could consume a substantial amount of any COLA increase next year. Legislation enacted by Congress last year restricted the 2021 Medicare Part B premium from increasing more than $3.90 per month due to the very low COLA increase of just 1.3 percent, a result of extremely low inflation due to the COVID-19 recession. The basic Part B premium is $148.50 per month in 2021. "With a high COLA increase in 2022, Part B premiums might make a catch-up jump, especially as people make up visits to get healthcare services that were postponed due to the pandemic," Johnson says.
The COLA will be announced in mid - October and the Medicare Part B premium often is announced by the end of November.
Legislation that would tie COLAs to an index that measures inflation experienced by older households, the Consumer Price Index for the Elderly (CPI-E), has recently been reintroduced. The CPI-E tends to grow more quickly that the CPI-W in most, but not every, year. "2021 is one of those times when gasoline prices soar and the CPI-W would yield the higher COLA," Johnson says. "If the COLA for 2022 were based on the CPI-E, we estimate it would be 5 percent compared to the 6.2 percent that we estimate for the CPI-W," Johnson notes. The Senior Citizens League works to protect and strengthen Social Security benefits and program financing.
With 1.2 million supporters, The Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Visit http://www.SeniorsLeague.org for more information.
Shannon Benton, The Senior Citizens League, 703-548-5568, [email protected]
SOURCE The Senior Citizens League