With day-to-day costs rising, these retirees are facing tough choices

Viola Golden, 74, worries about having to use her credit card for another dental procedure because the last bill she received was $800, she said.  (Morgana Adby/CBC - image credit)
Viola Golden, 74, worries about having to use her credit card for another dental procedure because the last bill she received was $800, she said. (Morgana Adby/CBC - image credit)

Seniors living on fixed incomes are struggling to keep up with expenses as their daily costs are rising faster than their pension payments.

For the period between October and December 2022, retirees 65+ with a yearly income under $129,757 can receive up to $685.50 a month through the Old Age Security (OAS) program.

People over the age of 60 who contributed to the Canada Pension Plan (CPP) before turning 70 can receive up to $1,253.59, but the average monthly payment is closer to $725, according to the government.

The OAS is adjusted for inflation roughly every three months, while the CPP is adjusted each January.

For some people, that's not enough.

Viola Golden, 74, has lived off of OAS and CPP payments since she retired from years of retail work at age 67.

Golden carefully plans her finances with her 76-year-old brother, who she lives with in an apartment.

Her expenses are rising faster than the increases to her pension and "$25 more a month is not going to do a damned thing for anybody," she said.

Golden is worried about a potential rent increase next year, because any unplanned expense could throw her budget off kilter.

"I don't want to go into welfare and I don't want to live in a neighbourhood where I don't feel safe. I feel safe where I am."

She avoids dipping into her modest savings, because that money is set aside for her funeral and she wants to leave some money to her grandchildren.

Cost of food rising

People are feeling the bite of the 10.3 per cent year-over-year rise in food prices Statistics Canada tracked in the 12-month period before September.

Food prices have gone up faster than the overall Consumer Price Index, which hit a 6.9 per cent year-over-year inflation rate in September, according to Statistics Canada.

Buying cheaper bread and cooking more beans were common strategies seniors said they used to keep their food bills manageable. Buying generic brand food or relying on bulk food to freeze were also common practices.

Golden thinks twice about buying a roast for Sunday dinner these days, because paying the nearly $30 price tag "feels like you are being robbed."

Morgana Adby/CBC
Morgana Adby/CBC

Transit costs also a concern

Brenda Thompson, 76, also said pension increases are not keeping up with the higher costs she sees everyday. She lives in her daughter's house along with her 22-year-old grandson who has autism.

Although Thompson's daughter has a good job, with everything becoming more expensive she wishes she could contribute more to household expenses.

"My daughter is the only one in the house who works. I help her as much as possible but with two small pensions a month, I cannot help her all that much."

Thompson was a "shut-in" after her husband died 19 years ago, but her daughter pushed her to make friends at the Good Companions' Seniors Centre roughly six years ago. Thompson is a volunteer at the centre today.

The recent increase in the cost of a monthly senior transit pass, from $46.75 to $47.75, was top of mind for Thompson because public transit is her only mode of independent transportation.

The bus pass is a non-negotiable expense for Thompson, and she is concerned about the rising cost preventing others from going out. Without a pass, a senior may be stuck at home each day except during the two days a week seniors ride free, she said.

When inflation slows, pensions pay off

Bob Baldwin, former policy director at the Canadian Labour Congress, said pension payments will catch up to the cost of living as they are indexed to inflation.

In October, OAS payments increased 2.8 per cent more than the monthly payments pensioners received during the months of July, August and September. CPP payments throughout 2022 saw a 2.4 per cent increase from last year, based on inflation calculated from October 2020 to October 2021.

In July, the government also announced pensioners receive a 10 per cent increase in their monthly income when they reach the age of 75.

When a pension payment increase lags behind real-time inflation, it means the value of a pension will also temporarily be higher than the cost of living when inflation eventually slows down, according to Baldwin.

"At first, when inflation is rising that delay provides less than complete protection the following January. When inflation declines it provides more than complete protection," Baldwin said.