Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, October 15, 1994 TAG: 9410170046
SECTION: BUSINESS PAGE: A4 EDITION: METRO
SOURCE: CRYSTAL CHAPPELL STAFF WRITER
DATELINE: LENGTH: Medium
But she wasn't disappointed Friday when the government said the average pensioner will get just $19 more a month when Social Security benefits and Supplemental Security Income increases 2.8 percent on Dec. 30.
Social Security benefits are adjusted each year and tied to the third-quarter Consumer Price Index. The government's annual cost-of-living adjustment is supposed to keep retirees from being harmed by inflation, and, for the past four years, inflation has been running at its lowest sustained rate in 30 years, the agency said.
But for 45 million Americans receiving Social Security checks, low inflation means the average monthly benefit for retired workers will rise to $698, effective with checks issued Jan. 3, from an average $679 a month this year.
The maximum SSI payments will advance from $446 to $458 for individuals and from $669 to $687 for couples.
For the Driscolls, the small increase means they will continue living on about $800 a month in government retirement benefits plus income from some small investments.
Virginia Driscoll, 83, said she may use the $19 to buy something for someone else.
"We don't need anything, to tell you the honest truth. We are satisfied."
The couple, who said Friday that they lived on $15 a week for seven years after they married 59 years ago, receive food from Meals on Wheels, so they still spend little money.
But other Roanoke-area senior citizens and those preparing for retirement are counting on other sources of income besides Social Security.
For Eleanor Caskey of Roanoke, next year's increase from Social Security may pay for her rent increase but little else.
"It will help me keep afloat," said Caskey, 75.
Caskey, a widow, said she receives money from her late husband's pension fund and also has worked part time for eight or nine years as a Meals on Wheels coordinator for the League of Older Americans. Her job helps pay for gas and lunch, she said.
Investing in private pension funds and mutual funds is necessary, said Caskey.
Friday's announcement of the small increase in Social Security underscores the reason that more than 75 percent of white-collar workers contribute to a pension plan at their workplace, said Roanoke certified public accountant J. Patrick Budd.
Also, before 1993, 50 percent of Social Security benefits were taxable but now 85 percent are, Budd said.
"I think over the last several years we have seen retired people just getting hammered because interest rates are low," meaning they are earning less on their savings, Budd said.
Baby boomers who will enter the Social Security system in 12 to 15 years are worrying whether the pension fund will be bankrupt by the time they're ready to draw benefits, Budd said.
As the life expectancy of people who retire at age 65 has increased to 83 for men and to 88 for women, people may be spending a quarter of their lives in retirement, said Connie Guelich, owner of Guelich Planning Services in Roanoke.
"People can't reach their goals and beat inflation with their savings unless they invest in some instrument that will grow with inflation like stocks and real estate," Guelich said.
"People my age have already made arrangements," Caskey said.
by CNB