48 Million Seniors Forecast to Receive Second Smallest Social Security COLA in '08

Trustees Suggest COLA Could Also Be Smallest Ever at 1.2 Percent

WASHINGTON, April 25 /PRNewswire-USNewswire/ -- In its annual report released to Congress earlier this week, Social Security's Trustees announced that the Social Security Cost of Living Adjustment (COLA) for 2008 -- the annual adjustment provided to seniors each year to help them keep up with inflation -- is forecast to be just 1.4 percent, and could be as low as 1.2 percent.

Since the COLA went into effect in 1975, it has never been lower than 1.3 percent, and has failed to exceed two percent only three times in its 32 year history.

That increase means that a senior with an average benefit of $1,044 would see a bump of just $14.60 per month beginning in January 2008.

In contrast, Medicare Part B premiums alone have increased by an average of more than 11 percent per year over the past five years. Due to hitting a spending warning this year, some analysts expect Part B premiums to climb by double digits again in 2008. As a result, the COLA would be wiped out for most seniors by increases in Part B premiums alone.

A majority of the 48 million Americans aged 65 and over who receive a Social Security check depend on it for at least 50 percent of their total income, and one in three beneficiaries rely on it for 90 percent or more of their total income. But because the Social Security COLA trails rising costs in everything from Medicare to energy costs, seniors will see their spending power diminish again next year, as it has for several straight years.

"It seems like we keep saying the same thing each year, but the remarkable thing is that the numbers keep getting worse year after year," said Shannon Benton, executive director of The Senior Citizens League. "Many of our lower- income seniors are going to have to choose between home heating, prescription drugs, or a sufficient supply of groceries."

With 1.2 million members, The Senior Citizens League (http://www.SeniorsLeague.org) is one of the nation's largest nonpartisan seniors groups. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association.

SOURCE The Senior Citizens League