The average Social Security retirement benefit in Tennessee is $1,393.61 per month. (@afishcalledmanda,Twenty/20).
The average Tennessee recipient collects almost $1,400 a month from Social Security, so with the increase, the typical senior is looking at about a $40 monthly boost, or $468 per year. Mary Johnson, Social Security and Medicare policy analyst with the Senior Citizens League, said this is the largest COLA increase since 2012.
“And there have been three years when there was no cost of living adjustment at all,” Johnson said. “And in 2017, it was only three-tenths of a percent, or almost zero.”
Johnson said people who receive less than $600 in Social Security income won’t see any net increase in their benefit.
More than 62 million people collect Social Security in the U.S., including more than 936,000 in Tennessee. Johnson said the low cost-of-living increases are concerning, because those who depend the most on this income have lost significant buying power over the years.
“Since the year 2000, Social Security benefits have lost about 34 percent of their buying power,” she said. “And that has really big implications for anybody trying to live on Social Security if they don’t have lots of savings.”
She said people often underestimate how much money they’ll need to live on in retirement and end up spending their savings faster than they planned or going into debt by taking out a second mortgage. Health care and high medication costs are often to blame.
Johnson added seniors in rural areas often face the greatest challenges.
“A lot of people simply did not have the type of job where they had the opportunity to have a 401(k) or to save,” Johnson said. “And 60 percent of retirees are dependent on Social Security for over half of their income.”
Tennessee is one of 37 states that does not tax Social Security benefits. Lawmakers continue to work on solutions for the COLA to better keep up with actual inflation rates.
