Make us your home page

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Recession puts squeeze on Social Security checks

Balancing retirement finances is getting tougher for the 50 million Social Security beneficiaries, including 600,000 in the bay area.

The recession is projected to wipe out annual cost-of-living increases on Social Security benefits for the next three years, something that hasn't happened since automatic adjustments pegged to inflation were adopted in 1975.

The Congressional Budget Office, which forecast the squeeze, also estimates in an admittedly sketchier projection that annual Social Security increases could average a meager 2 percent after that, extending through 2019.

It's a frightening forecast for 59-year-old Christine Adkins, a social worker who lives in Weeki Wachee. She's not worried about herself, but for her 91-year-old mother, who increasingly relies on Social Security to pay for staying in a private home after her investments were decimated last fall.

And Adkins fears for the senior citizens she helps at Hernando-Pasco Hospice. Already, many are struggling after the value of their homes and savings fell sharply. Some, she said, have the added financial burden of aiding relatives who have lost their jobs. Hernando County's unemployment rate of 12.7 percent is the highest among bay area counties and one of the highest statewide.

"A lot of my elderly people are really on fixed income," Adkins said. "When everything else goes up, if Social Security doesn't go up a little they're really having problems."

The Social Security Administration is due to make the final decision on the 2010 cost-of-living adjustment in October based on inflation over the previous year. It would take effect three months later.

Just three months ago, Social Security beneficiaries enjoyed the biggest annual boost to their checks in more than a quarter century. With spiraling gas prices driving up the cost of living, Social Security checks were boosted 5.8 percent for 2009. That translated to another $63 a month for the typical retiree.

Another economic reprieve is coming soon. As part of the stimulus program, the federal government in early May begins dispatching $250 payments to people who receive Social Security and Supplemental Security Income benefits.

Dave Bruns, a spokesman for Florida AARP, said that one-time payment will go a long way, but he's troubled by the prospect of a multi-year freeze on cost-of-living increases.

"The most important number is that one-fifth of Floridians age 65 and older — one out of five — rely on Social Security alone. It's their only source of income," Bruns said. "So anything touching Social Security is a very, very serious issue for more than a million older Floridians."

In particular, Bruns said, rising Social Security benefits are crucial to help offset rising and sudden health care costs. "By far, the biggest contributor to the devastation of older Floridians financially is not the stock market; it's unexpected health care costs," he said. "That's the most common cause of bankruptcy."

The prospect of a payout freeze was included in Congressional Budget Office projections issued last week. That same report drew attention for predicting that the Social Security trust funds will collect just $3 billion more in cash receipts than they will pay out in benefits in the fiscal year that begins next October. A year ago, before the recession struck, the office predicted an $86 billion cash surplus.

With a $2.4 trillion balance in the trust funds, there is little immediate impact on payouts caused by having a smaller surplus. But it cuts into the federal government's flexibility to tap into the funds to pay for other programs.

The long-term solvency of the Social Security system is linked to the depth and length of the current recession. But even an economic bounceback won't eliminate the severe strains caused by the looming retirement of 78 million baby boomers. Short of any major congressional overhaul or new taxes, Social Security is projected to deplete its reserves by 2041.

More immediate, though, is the budget crunch facing retirees if Social Security benefits remain flat in coming years.

Raisa Ferro, a retired registered nurse living in St. Petersburg, worries about those with health problems who face rising deductibles for their coverage. Exasperated, she's looking for some answers.

"What'll happen? We're not going to go out and rob a bank," she laughs. "We have to adjust to whatever happens. The cost of living has gone up tremendously, so what can you do? What can a senior citizen do? I don't know."

Times wires contributed to this report. Jeff Harrington may be reached at or (727) 893-8242.

By the numbers

603,025 Number of people receiving Social Security benefits in the Tampa Bay area

$1,153 Average monthly Social Security check as of January

$1,876 Average amount for a couple who both get Social Security

5.8 Percentage of cost-of-living increase for Social Security beneficiaries effective January 2009.

0 Estimated annual cost-of-living increase from 2010 to 2012

Recession puts squeeze on Social Security checks 04/02/09 [Last modified: Monday, April 6, 2009 8:46am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Austin software company acquires second Tampa business


    Austin, Tex.-based Asure Software acquired Tampa's Compass HRM Inc. late last week for $6 million. Compass focuses on HR and payroll.

    [Company photo]
  2. Hackers hide cyberattacks in social media posts


    SAN FRANCISCO — It took only one attempt for Russian hackers to make their way into the computer of a Pentagon official. But the attack didn't come through an email or a file buried within a seemingly innocuous document.

    Jay Kaplan and Mark Kuhr, former NSA employees and co-founders of Synack, a cybersecurity company, in their office in Palo Alto, Calif., in 2013. While last year's hacking of senior Democratic Party officials raised awareness of the damage caused if just a handful of employees click on the wrong emails, few people realize that a message on Twitter or Facebook could give an attacker similar access to their system. 
[New York Times file photo]
  3. On average, a quarter of Transformation Zone staff not returning next school year


    Combined, nearly one in four teachers staffed at eight schools in the Pinellas County school district's Transformation Zone will not return to their school in the fall.

  4. New Port Richey police investigating shooting that left one man wounded

    Public Safety

    NEW PORT RICHEY — A man was shot and wounded Saturday after police said he assaulted a restaurant employee.

  5. What to watch this week: 'Still Star-Crossed' on ABC, 'House of Cards' Season 5



    Robin Wright and Kevin Spacey in House of Cards Season 5.