The advocacy group Social Security Works estimates that a person age 75 in the future will get a yearly benefit that’s $653 lower after ten years of chained CPI than that person would get under the current formula. An 85-year-old will have $1,139 less to live on. While this doesn’t seem like a princely sum to an investment banker, it is to the very old.
(See the chart below; click to enlarge).
Speaking to a group of journalists this week at Columbia University, Sherry Glied, a professor at Columbia’s Mailman School of Public Health, pointed out that “the ‘older old’ outlive their assets and need long-term care and home care.” Public policy has to work for these groups, she said, and she urged reporters to look at how various prescriptions to fix the deficit affect the different groups of the elderly who have different needs and financial assets.
The ‘younger elderly’—the 66 and 67-year-olds—may be okay financially for the time being, since the chained CPI won’t substantially affect them for years, and they have not outlived their assets. That makes it easier medicine for policy makers to swallow.
Some chained CPI advocates believe that the very old—the ones WaPo calls “those who are well into their 80s,” could receive “a modest lump sum” to help them over their financial hump. The Simpson-Bowles blueprint proposed that those in this age group receive a small increase after they’ve been getting Social Security checks for 20 years.
Will this be enough? Who knows? In theory, it sounds like it solves a problem. In practice, it may not. Imagine 85 year olds barely able to walk having to show up at a Social Security office clutching financial documents, along with the light bill, to prove they are poor enough for the modest lump sum! Opponents argue that’s not what Social Security is about, and the media are beginning to report on that side effect.
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