By CHRIS ONSTOTT
The 37 million Americans on Social Security will see their benefit checks increase by an average of $16 starting in 1998, the lowest cost-of-living adjustment since 1987.
The second lowest increase in Social Security benefits since cost-of-living adjustments became automatic in 1975 is being greeted as both good news and bad news by senior citizen advocates.
“The good news for all Americans is that inflation continues to be low,” American Association of Retired Persons (AARP) Executive Director Horace B. Deets said in a news release. “However, older Americans continue to experience higher health care costs than the general population,” he said.
Health-care costs are going up at about twice the rate of inflation. Senior citizens are also paying much more than others for health care, Evelyn Morton, an AARP Washington headquarters legislative representative, said.
“Older Americans’ health-care costs are about twice the costs of younger Americans,” Morton said.
The low cost-of-living adjustment, which is due to the low rate of inflation for the economy, is good news for some Social Security recipients who also depend on other fixed sources of income. However, social security is the main source of income for more than half of the recipients.
“Sixty-three percent of people on social security count on it for at least half of their income,” Legislative Representative for the AARP, Jane Wiley said. Wiley also said 14 percent of Social Security recipients rely on benefits as their only source of income.
Although the 2.1 percent increase in social security paychecks is the lowest in years, there are some who think it could be lower, Randy Merchant, Provo field office manager for the Social Security Administration, said.
“I think that they are dealing really well with the cost-of-living adjustment in Washington. Unfortunately most people who have studied it believe that it overstates the cost of living by a couple tenths of a percent,” Merchant said.
The average Social Security recipient in Utah receives $745 a month, with couples receiving $1256 a month, Merchant said. According to Wiley, Social Security is on track to pay full benefits to retirees until the year 2029 when recipients will only receive 75 cents of every dollar paid into the system.