The good news: Social Security recipients are getting their first cost-of-living raise, 3.6 percent, since 2009. The bad news: Rising Medicare premiums will eat into that increase for many, and could erase it entirely for a small percentage.
Advocates for older Americans say prices on necessities like drugs continued to rise even during the years when no increases were given. Plus, volatile food and energy prices strain the budgets of retirees on a fixed income. On Wednesday, the government reported that consumer prices rose 0.3 percent in September, driven by higher prices for food and for gas. Minus prices hikes for those items, inflation rose a mere 0.1 percent in the month.
Still, in the latest 12 months, rising prices were enough to justify the 3.6 percent increase.
“Seniors have basically been in a standstill for two full years, and some of that breathing room is going to be wiped out by the fact that premiums are going up,” says Cathy Weatherford, CEO of the Insured Retirement Institute, a trade association for providers of annuities, insurance and financial planning.
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