The problem is that the Consumer Price Index uses a broad range of goods and services to determine the change in cost of living from year to year. Seniors, however, are not equally affected by everything that is measured in the index.
For example, falling gas prices have recently led the CPI to indicate that Social Security benefits should not get an annual increase. Retirees who no longer need to commute to work are not as helped by falling gas prices as much as other demographic groups. Instead, retirees are more affected by the rising costs of health care and prescription medications.
The net effect is that since the year 2000 seniors’ living expenses have increased by 84% while Social Security benefits have only increased by 41%.
