WASHINGTON - Millions of Retired Americans face shrinking Social Security checks next year.
The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted in 1975. If COLAs are denied, it will be the first time in a generation that payments would not rise.
Though Social Security benefits cannot be decreased, yet the buying power of theri monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly.
Cost of living adjustments are tied to inflation, which has been negative in 2009.
Advocates say that retirees still face higher prices because they spend a disproportionate amount of their income on health care, declining home values, and shrinking retirement portfolios just as they are relying on those assets for income.
Approximately 50 million retired and disabled Americans receive monthly Social Security benefits. The average benefit for retirees is $1,153 per month. All beneficiaries received a 5.8 percent COLA increase in January, the largest since 1982.
More than 32 million people are in the Medicare prescription drug program. Average monthly premiums are set to increase from $28 this year to $30 next year, though they vary by plan.
Condensed from an article by Associated Press Writer Stephen Ohlemacher - Sun Aug 23, 2009.