"We all know what happened to our prices at the gas pump," Montgomery said. "In some sense for seniors, this is sort of catch-up. They already had to pay out the greater amount for the utility bills and the cost of driving cars and things like that."
In addition to the cost-of-living adjustment, the Social Security Administration also announced yesterday that the maximum amount of earnings taxable as Social Security income will increase from $102,000 to $106,800. The change will affect 11 million workers, according to a news release.
Amid the collapse of the world's financial markets, the foreclosure crisis and rising joblessness, the Social Security system has received relatively little attention in the current presidential election, particularly compared with 2000, when Democrat Al Gore promised a "lockbox" to protect the Social Security trust fund, or 2004, when President Bush made a partial privatization of the system a major part of his platform.
If no changes are made, the Social Security trust fund is projected to deplete its reserves in 2041 and will begin paying out more than it collects even sooner, starting in 2017.
Lundquist said the current economic crisis underscores how important it is to shield Social Security benefits from the volatility of the stock market, because so many older adults, particularly women and minorities, rely on those funds.
"When you start to think about risking that bedrock, it really puts it in perspective," she said.
As word spread yesterday about the benefits increase, seniors welcomed the news, saying it would help them pay for basic necessities such as insurance, medication and rent.
"It's very welcome. Something good is happening in Washington," said Jim Williamson, who was walking his poodle and bichon frise along Charles Street yesterday morning.
Williamson, who declined to give his age but allowed that he was old enough to receive Social Security benefits, said the increase would help him keep his Blue Cross and Blue Shield insurance, for which the premium rose 30 percent this year.
Betty Warfield and Lorraine Capperella sat on chairs in the courtyard outside Westminster House devising exotic ways to spend their added income. Capperella, who is 54 and receives Social Security disability benefits, said she would buy new clothes and give some money to her grandchildren.
