COLA increase lowest in four years

The Social Security administration announced a 2.3 percent cost of living adjustment (COLA) increase for next year recently - the lowest in four years.
It will not help retiree Clifton Rutherford much.
The 77-year-old Jamaica resident’s rent is scheduled to rise $20 in January to $700. That is twice the $10 boost he will get in his Social Security check, under the smallest nationwide COLA increase since 2004.
Rutherford regularly goes to the Jamaica Service Program for Older Adults, a senior center that offers hot lunches at a bargain - $1. However, Rutherford’s budget is still very tight: His diabetic wife, Burlette, recently had to request a different prescription because the couple no longer could afford $100 for a bottle of pills.
For the Rutherfords, every extra dollar helps pay the bills. Rutherford emigrated from Jamaica to New York at age 45. A former police officer in his homeland, Rutherford quickly found work in the U.S. as a security guard. He later retired as a bank manager with a small pension and health benefits.
Because of paying into the system at a late age, his Social Security benefits are less than those of many other Americans.
In Queens - the borough with the most residents who draw upon Social Security - senior centers increasingly provide an economic silver lining for the gray-haired set as the cost of living edges upward. Many offer financial advice, hot meals and buses to supermarkets and doctor’s offices. Nevertheless, many seniors need additional help.
Seniors in Queens and around the country had hoped to find some relief from the annual COLA increase in Social Security. But on average, the 2.3 percent hike translates to $24 a month for individuals and $39 a month for couples - not nearly enough to deal with rising energy prices and other cost increases, many seniors say.
“How can they do that? It is outrageous,” said Roz Kleinman, 73, a Bayside retiree who receives Social Security benefits. Kleinman is a regular at the Services Now For Adult Persons, Inc. (SNAP) senior center in Queens Village, where she line danced and listened to a lecture last Wednesday October 17, the day the COLA amount was announced.
At lunch, as her table of friends groused about the disappointing Social Security news, Kleinman said, “Along with osteoarthritis and doctor’s appointments - what can I tell you?”
Kleinman said she planned to cut down on restaurant meals and shopping. “You just have to tighten your belt a little bit,” she said.
For the 11 percent of elderly Queens residents who live below the poverty level, their economic belts already might be tightened to the last notch. Queens led other boroughs with the highest number of those 65 and older on Social Security - 217,880, according to 2005 census data.
Last year, the COLA increase was 3.3 percent. The jump in energy prices caused by Hurricane Katrina led to a 4.1 percent Social Security hike in 2006 - the largest in 15 years.
To pay for the latest increase, the government announced it would boost the maximum amount of earnings subject to the Social Security tax to $102,000 from $97,500 - meaning 12 million people will pay higher taxes to support the system.
David Sloane, a director for AARP, the seniors’ lobbying organization, issued a statement after the October 17 announcement: “While essential, the COLA is not enough to help many beneficiaries keep up with the skyrocketing costs of health care, energy and food.”
“If people say food and gas is up, you can’t argue with them,” said Patrick Jackman, an economist with the Bureau of Labor Statistics. Jackman helped compile the index of consumer prices that was used to determine the COLA increase. He said the price of milk, gas and eggs spiked approximately 20 percent last year from the previous nine months.
However, Jackman said the price adjustment also was determined by falling prices for new cars, electronics and personal computers from June to September. The bureau compared those prices to the same period last year and determined a smaller increase was needed. “The consumer price index is not constituted to reflect any particular household. It is an average,” Jackman said.