--- title: 'Inflation Has Eroded 40% of Social Security''s Buying Power Since 2000: Study' description: Social Security benefits have not kept pace with inflation. A recent report finds their purchasing power has fallen 40% since 2000. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 499 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ published: '2022-05-11T14:29:45.000Z' modified: '2024-01-10T17:28:27.000Z' section: Economy and Politics tags: - News word_count: 668 canonical: https://money.com/social-security-cola-inflation-report/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Elderly Couple In Front Of Laptop With Oversized Social Security Card Behind Them](https://img.money.com/2022/05/News-Social-Security-Benefits-Loose-Purchasing-Power.jpg) Thanks to inflation, Social Security checks don’t go nearly as far as they used to. And while beneficiaries are set to receive a projected 8.6% raise next year, it still won't be enough to keep ahead of rising prices. That's because cash benefits from the Social Security Administration (SSA) have lost 40% of their buying power since 2000, according to data released Wednesday from The Senior Citizens League (TSCL), a nonprofit advocacy group. Much of that decrease happened over the year ending in March 2022. During that year alone, beneficiaries saw a 10 percentage point drop in their purchasing power, TSCL found. “That’s the deepest loss in buying power since the beginning of this study by The Senior Citizens League in 2010,” said Mary Johnson, TSCL’s Social Security policy analyst, in an [announcement](https://seniorsleague.org/social-security-buying-power/) Wednesday. Major contributors to that 10-point decline include the skyrocketing cost of home-heating oil, gas, used vehicles, food and Medicare premiums, Johnson’s research shows. The reduction of purchasing power effectively translates into a reduction of benefits, as people can no longer afford the same amount of goods as they could before. That’s despite Social Security benefits nominally increasing annually through cost of living adjustments (COLAs), which are specifically in place to help beneficiaries weather inflation. The Labor Department said Wednesday that consumer prices rose 8.3% for the year ending in April. Last month, the inflation rate was [8.5%](https://money.com/inflation-highest-since-1981-gas-prices/). This rate is known as the “headline” inflation rate. When it comes to Social Security benefits, the agency uses a slightly different inflation metric, and this rate was even higher — 8.9% in April, and 9.4% in March. Based on these numbers, Johnson estimates that the COLA for 2023 will be 8.6%, a small decrease from her [previous projection of 8.9%](https://money.com/social-security-benefits-cola-increase-2023/). Recent price surges have highlighted cracks in how the SSA calculates the COLAs. Each year, the SSA bases its annual COLAs on inflation numbers from July, August and September and announces the COLA in October, but doesn’t start making payments until January of the following year. If inflation spikes in or after October, when the COLA rate is calculated, beneficiaries are forced to essentially take a pay cut. Case in point: this January, Social Security beneficiaries got a [5.9% boost in benefits](https://money.com/social-security-cola-increase-2022/), the biggest increase in four decades. Still, that raise hasn’t kept up with the soaring prices that people have been dealing with in the meantime. As Johnson’s research shows, the result is a massive decrease in buying power over the years. To maintain the buying power from 2000, Social Security benefits would need to be $540 per month higher than they currently are. In other words, Social Security benefits have increased by 64% since 2000. Over that same period of time, Johnson found that the expenses for typical seniors rose 130%. One big expense for older adults is medical costs, and [health care inflation](https://money.com/retirement-healthcare-costs-inflation-report/) tends to rise at a higher rate than general inflation, further contributing to the loss of purchasing power. “Retirees know all too well that Social Security benefits don’t buy as much today as when they first retired,” Johnson said in the news release. It’s not just retirees who are feeling the impact of this shortfall, either. More than 70 million Americans rely on checks from the SSA every month. Of that number, approximately 50 million are receiving retirement benefits. The remaining 20 million include people with disabilities as well as family members of deceased workers, among other beneficiaries. While Johnson’s latest COLA projection is based on the most recent numbers from the Labor Department, we won’t know for sure what the exact COLA for next year will be until October, when the SSA makes the announcement. And while any raise would likely be welcomed, the checks won’t hit bank accounts until January 2023. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/social-security-cola-inflation-report/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Inflation", "item": "https://money.com/inflation/" }, { "@type": "ListItem", "position": 4, "name": "Inflation Has Eroded 40% of Social Security's Buying Power Since 2000: Study" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/social-security-cola-inflation-report/#webpage", "url": "https://money.com/social-security-cola-inflation-report/", "name": "Inflation Has Eroded 40% of Social Security's Buying Power Since 2000: Study", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2022-05-11T14:29:45.000Z", "mainEntity": { "@id": "https://money.com/social-security-cola-inflation-report/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/social-security-cola-inflation-report/#breadcrumb" }, "dateModified": "2024-01-10T17:28:27.000Z" }, { "@type": "NewsArticle", "headline": "Inflation Has Eroded 40% of Social Security's Buying Power Since 2000: Study", "articleSection": "Economy and Politics", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2022/05/News-Social-Security-Benefits-Loose-Purchasing-Power.jpg", "width": 2880, "height": 1920, "caption": "News-Social-Security-Benefits-Loose-Purchasing-Power" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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