The current economic recession has placed tremendous challenges on all Americans who find themselves struggling to stay afloat and someday hope to get ahead. For the tens of millions of older Americans who depend on Social Security as the bedrock of their financial well-being, their situation stands to go from bad to worse.
For the first time since automatic cost-of-living adjustments (COLA) have been in effect, people in Social Security will not receive a COLA in their monthly benefit checks. The reason for the lack of a COLA only demonstrates the urgency of the need.
America's low inflation — which triggered the loss of a COLA — does not reflect the real drivers of spending for older Americans. No. 1 on that list is health care. Skyrocketing costs of prescription drugs, insurance premiums and co-pays have far outpaced general inflation. People in Medicare spend an average of 30 percent of their income on health care costs — six times more than what people with employer health coverage spend.
Nancy LeaMond is the executive vice president of Social Impact for AARP.
Courtesy of AARP
Courtesy of AARP
Tens of millions of people who did the right things now find themselves with increasingly fewer — and increasingly worse — options. Many spent their lives working and saving for their retirement, only to see their nest eggs and home values plummet. Those who count on low-risk, interest-bearing accounts and other investments for income find returns are at all-time lows. Older workers who have lost their jobs face their own particular challenges, spending longer periods trying to get back on the job than other Americans.
As Congress looks for solutions to help us all weather this recession, older Americans must not be overlooked. AARP believes that extending last year's $250 emergency relief is simply the right and responsible thing for Washington lawmakers to do, and we will work with members of Congress from both sides of the aisle to find a fiscally responsible way to make it happen.