7 everyday costs that are rising faster than social benefits
Social Security benefits vary from person to person and depend on a number of factors: how much they earned during their working years, how long they worked and contributed to the system, and when they retire. The final amount is usually calculated using “average indexed monthly earnings,” which summarizes up to 35 years of indexed earnings, according to the Social Security Administration (SSA).
In January 2024, the average benefit amount for a retiree was $1,907. Some people also qualify for Supplemental Security Income (SSI), which generally ranges from $943 (individuals) to $1,415 (couples), according to the SSA.
During times of high inflation, cost-of-living adjustments (COLAs) may be made. A COLA increases Social Security and Supplemental Income (SSI) benefits to counteract rising prices. Sometimes, however, these adjustments are not enough.
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Social benefits have lost 20% of their purchasing power since 2010
According to the advocacy group Senior Citizens League, Social Security benefits have lost 20% of their purchasing power since 2010. That means that $100 in 2010 would only buy $80 worth of goods today. To make up for that loss of value, the average retiree would need to receive an additional $370 a month, or $4,440 a year.
In January of each year, Social Security recipients receive a COLA. But in eight of the last 15 years, inflation has exceeded the COLA.
Since 2010, COLAs have increased benefits by a total of 58%βor 3.9% per year. During that time, the cost of everyday goods and services has increased by about 73%β4.9% annually.
Which everyday costs have increased the fastest compared to social benefits over the past decade and a half? These are the biggest costs.
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Latest iPhone
Technology has never been cheap, but prices for the latest iPhones – base models – have skyrocketed. In fact, they cost 301.5% more today than they did in 2010.
New and used cars
According to Kelley Blue Book (KBB), the average price of a used car is $25,540, down 4% from last year. Compared to 2010, it’s up 217%.
KBB also found that new cars cost an average of $47,401, an increase of 81.2% from 2010.
Bread
Bread is a staple in many U.S. households, and over the past 15 years, its price has increased by 146.7%, or about 9.78% per year, with a significant spike in inflation during the COVID-19 pandemic accounting for much of that increase.
Veterinary services
For retirees with pets, veterinary care is almost unavoidable. But it is also largely unaffordable compared to the past. The cost of veterinary services has increased by 89.7% since 2010.
Housing
Since 2010, the average home price has increased by 88.6%. According to a report by Zillow, the average home price in the U.S. is $362,481 β that’s a 3.3% increase in the last year alone.
Rents for owner-occupied homes have not increased quite as much, but are still up by 66.4%. This corresponds to an increase of around 4.43% on an annual basis.
Many retired homeowners must deal with additional costs such as maintenance, repairs, insurance and taxes. Property taxes have also increased by 88.6% since 2010.
Meat
Not all meat prices have risen faster than social benefits can keep up, but beef has definitely become more expensive. Since 2010, ground beef prices have risen 73.1%, or 4.87% per year.
If we go back a little further, the average price for a pound of ground beef is currently $5,497. In 2000, it was $1,483, according to the U.S. Bureau of Labor Statistics (BLS).
Other meats have also increased in price. Bacon, for example, now costs $6,883 per pound, an increase of 10.4 percent from last year.
Some meats, like boneless chicken breasts, have actually dropped in price. That may be good news for those living on welfare.
Transport services
Transportation services have also increased by 64.2% over the last 15 years. But that’s not all – gasoline prices have also increased significantly.
In July 2024, the average price of gasoline (all grades) was $3.60 per gallon. In 2020, it cost just over $2, according to the U.S. Energy Information Administration.
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This article originally appeared on GOBankingRates.com: 7 Everyday Expenses That Are Growing Faster Than Social Security Benefits