Higher-Priced Basics Eat 70% of Social Security Checks

Monthly Social Security checks are now worth $60 less because of inflation

A senior couple sits at a dining table, using a laptop computer with paperwork and bills on the table.
Photo:

Mint Images / Getty Images

Households that depend on Social Security are spending a larger percentage of their monthly benefit on necessities than they were a year ago, even after this year’s significant cost-of-living adjustment boosted benefit checks. 

Spending in April for food, housing, gasoline, and utilities like gas and electricity consumed 70% of the average Social Security payment of $1,479 (or $2,958 for two-beneficiary households), according to an analysis by The Balance. Last year, spending for the same items took up 60% of the average monthly Social Security benefit payout. The Balance’s analysis looked at spending and inflation figures from the Bureau of Labor Statistics (BLS) and other sources, along with average monthly benefit figures from the Social Security Administration.

In dollar figures, the average monthly Social Security payment in April (the most recent BLS figure available) was worth $60 less than it was last year due to inflation.

With inflation rising 8.3% over the past year, Americans reliant on fixed incomes (like Social Security benefits) have less ability to withstand the rising costs of gas, housing, groceries, and other expenses. This year the government increased Social Security payments by 5.9% to to help beneficiaries cope with rising inflation.

Rising gasoline prices and home utility costs are the biggest contributors to rising prices overall, with gasoline prices jumping more than 44% in the past year, costing over $300 a month. The average natural gas bill is now $46, jumping 20% from 2021. The cost of electricity jumped as well, by roughly 11%, to $130 a month.

Other energy costs, like fuel oil have skyrocketed, soaring 80.5% nationally, while propane, kerosene, and firewood have risen 26.5%.

Higher gasoline prices were the main driver in the rise in transportation costs, which have grown 8.5% overall since last year. Mass transit  costs have only risen 2% since 2021.

The cost of food and housing also increased, taking another swipe at fixed incomes. Food prices have leapt 9.4% in the past year, and unfortunately for Americans looking to save by cooking at home, groceries are 10.8% pricier. That jump outpaced the 7.2% increase in the cost of dining out.

The food items with the largest price hikes were meat and dairy products, according to The Balance’s analysis. Eggs have been severely impacted by inflation, climbing 22.6% since last year, while butter has jumped 16%. Ground beef, milk, and chicken are together more than 14.5% more expensive than they were in 2021. 

Nationally, rent costs have crept up to an average $1,326 in April, up from $1,313 in March. Fortunately, as of 2018, nearly 80% of Americans aged 65 and older owned their homes, meaning that for many receiving Social Security, increased housing costs might not have had much impact. But for any Americans struggling to pay bills, inflation could spell disaster if the costs of housing, medical care, and food rise too much.

Unfortunately for residents of the “sun belt” states of Arizona, Florida, Georgia, California, and Texas, the cost of necessities is rising even faster, putting more pressure on fixed incomes.

Inflation for food, housing, medical costs, transportation, and other costs jumped 11% in Phoenix, the most out of all the cities examined. Atlanta, Tampa, and Riverside, California saw inflation surge by 10% or more. Residents of Boston and Washington, D.C. saw the smallest overall inflation increase at 7.3%, lower than the national inflation rate of 8.3%.

Some things older Americans buy aren’t increasing in cost as rapidly, however. Medical care costs for hospital services, nursing homes, and prescription drugs have increased by less than 3%, though health insurance expenses have risen by 10.4%. Regionally, residents of Los Angeles pay the most for medical care, which has increased 6.5% there. Across the country in Baltimore, medical costs have risen just 0.1%.

Although inflation seems to be cooling—dipping from 8.5% in March to 8.3% in April—costs are still going up, stretching Americans’ budgets and paychecks. This is especially true for Americans on fixed incomes who can’t easily increase their income with a salary negotiation or by taking a job that pays better.

Methodology

Percent changes in consumer prices were sourced from the Bureau of Labor Statistics (BLS) Consumer Price Index. Items were grouped based on author’s discretion and not BLS category groups.

The average social security benefit was sourced from the Social Security Administration and adjusted for inflation with the CPI for All Items annual average.

Dollar amounts for products were sourced from either the BLS Average Price data or the Market News Retail dataset from the USDA Agricultural Marketing Service. Average monthly consumption data was sourced from the Energy Information Administration’s Petroleum and Other Liquids Prime Supplier’s Sales Volumes, Natural Gas Summary, and 2015 Residential Energy Consumption Survey as well as the USDA’s Average daily intake of food by food source and demographic characteristics 2017–18. Rental cost data was sourced from Apartment List’s Data & Rent Estimates. Average U.S. Household Size taken from the U.S. Census Bureau’s 2020 ACS 5-year estimates.

Correction - June 30, 2022: This article has been updated to correct the dollar amount of the combined cost of rent, food, and utilities compared to last year in the description for the chart titled "Gasoline, Natural Gas, and Meat and Dairy Driving Hike in Everyday Expenses." Major expenses such as rent, food, and utilities like gasoline, natural gas, and electricity are almost $232 more expensive than last year.

Research and analysis by
Adrian Nesta
Adrian Nesta, Research Analyst on the Data Journalism team at Dotdash
Adrian Nesta is a research analyst on the Data Journalism team at Dotdash, the digital publisher that owns and operates The Balance. His work includes data collection, cleaning, analysis, and visualization for stories in the data journalism portfolio across every vertical at Dotdash.
Was this page helpful?
Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Bureau of Labor Statistics. “Consumer Price Index Summary.”

  2. Social Security Administration. “Cost-of-Living Adjustment Information for 2022.”

  3.  Bureau of Labor Statistics. “Consumer Price Index Databases.”

  4. Social Security Administration. “Benefits Awarded by Type.”

  5. U.S. Department of Agriculture. “Market News Data Download.”

  6. Energy Information Administration. “Petroleum & Other Liquids.”

  7. Energy Information Administration. “Prime Supplier’s Sales Volumes.”

  8. Energy Information Administration. “Natural Gas Summary.”

  9. Energy Information Administration. “2015 Residential Energy Consumption Survey.”

  10. U.S. Department of Agriculture. “Average Daily Intake of Food by Food Source and Demographic Characteristics 2017–18.”

  11. Apartment List. “Data & Rent Estimates.”

  12. U.S. Census Bureau. “2020 ACS 5-Year Estimates.”

Related Articles