For many senior citizens who rely on Social Security as their main income, $19 extra a month isn't enough.
The U.S. Social Security Administration announced last month the automatic cost-of-living adjustment for social security benefits would increase in 2013 by 1.7 percent.
But the increase announced does not keep up with inflation and is not enough for senior citizens who are scrimping by from month to month and counting on Social Security, said Anthony Liuzzo, Ph.D., a professor of business and economics at Wilkes University, said.
"Senior citizens don't save as many dollars as younger people so this is going to hurt them. They need this money," Dr. Liuzzo said. "Social Security was always meant to be a supplement and not a main source of retirement income. It's unfortunate that most senior citizens in our area depend on that check."
Social Security payments average $1,131 a month or $13,572 a year. A 1.7 percent increase amounts to about $230 a year.
Nationwide, more than 56 percent of Americans receive Social Security benefits. According to national reports, much of the 1.7 percent increase in benefits could get wiped out by higher Medicare premiums, which are deducted from Social Security payments.
In the region's two largest cities, the cost-of-living adjustment will be needed to absorb expected tax increases for homeowners in 2013. Under Wilkes-Barre Mayor Tom Leighton's 2013 budget proposal, the increased cost to the average household will be about $183 per year more than their current property tax bill. Scranton has not introduced a budget yet, but under the city's recovery plan, the increased cost to the average household will be at least $30 more than the current tax bill.
"The reason this all is happening is the recession that we have just come out of and are still coming out of. It's taking forever to recover completely," Dr. Liuzzo said.
The increase is not enough to keep up with the costs facing senior citizens, such as the price of gas, Lou Ingargiola, president of Ingargiola Wealth Management in Dunmore.
"You need more to live on and your basket of goods has gone up more than 1.7 percent," Mr. Ingargiola said. "You should never depend on Social Security. If you depend on only Social Security, your retirement will be neither social or secure."
Pete Loftus, a partner in ParenteBeard accounting firm in Wilkes-Barre said the 1.7 percent increase is small "but every little bit helps if that's all you rely on."
"For seniors that rely exclusively on Social Security, obviously any increase is a good thing, but I don't think it goes far," Mr. Loftus said. "If that's all you rely on, it doesn't provide a very comfortable lifestyle."
Contact the writer: dallabaugh@citizensvoice.comSocial Security
Cost-of-live adjustments
by year for last 20 years
January 1994 - 2.6%
January 1995 - 2.8%
January 1996 - 2.6%
January 1997 - 2.9%
January 1998 - 2.1%
January 1999 - 1.3%
January 2000 - 2.5%
January 2001 - 3.5%
January 2002 - 2.6%
January 2003 - 1.4%
January 2004 - 2.1%
January 2005 - 2.7%
January 2006 - 4.1%
January 2007 - 3.3%
January 2008 - 2.3%
January 2009 - 5.8%
January 2010 - 0.0%
January 2011 - 0.0%
January 2012 - 3.6%
January 2013 - 1.7%
SOURCE: U.S. Social Security Administration