If you’re receiving Social Security benefits, it’s no surprise to you that your monthly checks don’t buy as much as they used to. All the same, it’s shocking to see just how much their purchasing power actually has shrunk.
Retirees who started Social Security before 2000 lost about 40% of their benefits’ buying power between 2000 and March 2022. That’s according to an ongoing study on Social Security buying power by the Senior Citizens League, an advocacy group.
Social Security’s most recent annual cost-of-living adjustment (COLA) was 5.9%, the biggest boost to retirees’ benefit checks in decades. But between March 2021 and March 2022, Social Security’s buying power shrank 10%. A COLA of 8.6% could be justifiable for 2023, the study finds.
1. Home heating oil
Price increase since 2000: 348%
The Senior Citizens League study follows costs for 37 goods and services typically used by retirees, comparing inflation with COLAs. Heating oil, or fuel oil — used to heat homes and buildings and to generate electricity in power plants — is one of those goods.
According to the league’s research, the average cost of heating oil increased from $1.15 per gallon in January 2000 to $5.13 per gallon in March 2022.
2. Prescription drug costs (out of pocket)
Price increase since 2000: 285%
In Maine, worries over prescription drug costs led 30% of adults in the state to not fill a prescription, cut pills in half or skip doses of prescribed medicines, according to a Public News Service interview with AARP state director Noel Bonam.
“There are some older adults, especially low-income older adults, [who are] having to decide if they have to pay for prescription drugs or buy their next meal,” Bonam said.
Read more: “10 Ways to Save on Prescription Drugs”
3. Medicare Part B premiums
Price increase since 2000: 274%
Medicare this year increased by 14.5% the cost of the standard monthly premium for Medicare Part B, which covers outpatient care, including doctors’ visits and diagnostic tests.
While not the largest percentage-rate increase on record, this was the largest dollar-amount increase in Medicare history. It translated to an additional $21.60 per month for the standard premium — and more for retirees with higher incomes.
4. Gas (all grades)
Price increase since 2000: 231%
On May 31, the national average price for regular unleaded gas reached a new high of $4.62 per gallon, according to AAA — and it was not the first record high reached this year.
Back in January 2000, gas averaged just $1.31 per gallon, according to the Senior Citizens League.
Price increase since 2000: 195%
Liquid propane fuel is used in homes, particularly in rural areas where natural gas pipelines might not reach, for space heating, water heating, cooking and clothes drying, says the U.S. Energy Information Administration.
Low-income seniors may be eligible for help with the cost of heating. To learn more, contact the federal Low Income Home Energy Assistance Program.
6. Veterinarian services
Price increase since 2000: 185%
For many seniors, particularly those living alone, pets provide essential emotional connections. Here’s bad news: The cost of veterinary care, never inexpensive anyway, is growing rapidly.
Increasing costs of medicines and surgical supplies contribute to the trend. Also, prices tend to rise when small veterinary offices are bought up by large corporations, says WFXR TV, a Fox affiliate serving Roanoke and Lynchburg, Virginia.
Read more: “9 Ways to Get Affordable Vet Care”
7. Homeowners insurance
Price increase since 2000: 163%
Homeowners insurance premium rates have risen a good deal since the COVID-19 pandemic began, says the Insurance Information Institute, an industry organization. Factors include supply chain issues and labor shortages that push up the cost of home repairs.
But the cost pressures predate the pandemic, as rates have been affected by increasing losses due to natural disasters, including floods, hurricanes and wildfires. Fueling higher rates is growing home construction in risk-prone areas that are “most vulnerable to weather and climate-related damage,” the institute says.
Read more: “How Inflation Puts Your Homeowners Insurance at Risk”
Price increase since 2000: 162%
The cost of bacon increased from $2.75 per pound in January 2000 to $7.20 per pound in March 2022, according to the Senior Citizens League’s research.
Read more: “8 Easy Ways to Cut Back on Meat”
9. Ground chuck
Price increase since 2000: 156%
The per-pound price of ground chuck increased from $1.90 to $4.87 during the same 20-year timespan.
10. Total medical expenses
Price increase since 2000: 155%
U.S. households led by someone aged 65 or older spent $6,668, on average, on health care in 2020. That’s about 14% of those households’ total spending that year.
Even with Medicare, the federal health insurance program that primarily serves people age 65 and older, the cost of health insurance is easily the biggest medical cost retirees face, as we explain in “Here’s How Much Seniors Actually Spend on Health Care.”
Read more: “7 Ways Anyone Can Cut Their Health Care Costs“
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