By Matt Sedensky, Associated Press
WEST PALM BEACH, Fla. (AP) — For some, the just-announced increase in Social Security checks amounts to an extra meal out, a little more cash for clothes or a new pair of shoes, some added comfort in retirement. For Elizabeth Davis, it's a crucial boost to the only thing keeping her afloat.
The 71-year-old Miami woman grew up picking cotton on her family's South Carolina farm, raised four children and has worked all her life, even now at a preschool. She is divorced, and her small 401(k) account "went down the drain," she said. So she counts the days to the third Wednesday of each month, when her $668 Social Security check arrives and she is able to pay her bills.
"I could live a little better," she said of the 3.6% raise announced this week, the first in two years. "I don't have anything to look forward to until that check every month."
The reaction the cost-of-living adjustment has garnered illuminates the divide between the rich and poor among America's oldest residents. Social Security represents a staggering share of income for lower- and middle-class seniors — made evident just this week in a government report — and for whom any increase can make a world of difference. For upper-income seniors, it's simply a nice plus.
Starting in January, 55 million Social Security recipients will get increases averaging $39 a month, or about $467 a year. In December, more than 8 million people who get Supplemental Security Income, the disability program for the poor, will get increases averaging $18 a month, or about $216 a year.
Davis felt the effects of no raise the past two years. Her only other income is a small stipend for her work that averages about $232 a month. She's been using her credit card more and building debt. She's already trimmed as much as she can — from cutting her cable plan to limiting her phone usage to keeping the air conditioning off. She owns her home, but taxes, insurance, utilities and groceries eat up nearly all her income. As those costs rise, there was no wiggle room.