Let's Talk Opinion

Social Security

Seniors would see smaller Social Security checks under Obama budget
By Tami Luhby 
Senior citizens would see their Social Security checks shrink under President Obama's latest budget proposal.
The budget plan, released Wednesday, calls for changing the way the annual cost of living adjustments for Social Security and other federal programs are calculated. Shifting to "chained CPI" from the current inflation measure could reduce the federal debt by $230 billion, but it would also mean that seniors would get smaller increases in their Social Security payments each year.
The president's proposal would provide protections for the oldest seniors, low-income seniors and veterans, and those who are disabled. Seniors ages 76 to 85 would receive a supplemental payment annually to offset some of the slowdown in growth. Also, programs that are geared for those in or near poverty, such as the Supplemental Security Income, would be exempt from the switch to chained CPI.
But the change would still make a difference for many people. Chained CPI is expected to grow between 0.25 and 0.3 percentage points more slowly than the current CPI measure.
Initially, the reduction in the growth of Social Security checks would be quite small ... between $38 and $45 in the first year, for the average retired worker. But over time, that would grow into the hundreds of dollars.
Someone who started collecting the average Social Security benefit for a retired worker in 1999 would receive $12,972 in 2012. But let's say the Social Security Administration had already been using chained CPI -- that person would get only $12,336 this year, according to the National Academy of Social Insurance. That's nearly 5% less.
The difference gets bigger over time. According to the National Women's Law Center, a retiree who was collecting $17,520 last year would see 6.5% less, or $1,139, by age 85, if chained CPI were in effect. A decade after, their payments would be 9.2% smaller, or $1,612. These calculations do not include the supplemental payments, the details of which were not released until Wednesday.

For many seniors, these decreases aren't trivial. Nearly two in three recipients rely on Social Security for at least 50% of their income. And Social Security makes up at least 90% of the income received by 36% of seniors.
"For a lot of elderly people, Social Security is virtually their only source of income," said Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities. "A decrease of almost $600 a year ... for people in that situation is very significant."
That's especially true for older seniors, who have likely spent down their other assets and seen other income sources dry up. Also, these recipients are usually contending with growing medical bills, which chained CPI doesn't account for. The protections Obama is planning may mitigate the problems, but some experts don't think they'll fully shield this group.
"The older you get, the bigger the reduction you get,' said Gary Koenig, director of economic security for AARP's Public Policy Institute. "It's hitting at a time when folks can least afford it."

2 Comments to Social Security:

Comments RSS
Soyabean Tips on Tuesday, September 03, 2013 2:18 AM
Very useful information you have shared through this post. The women's self defense classes are really a great way to train them.
Reply to comment

Patrol services on Saturday, December 14, 2013 4:36 AM
People I have seen didn't plan for keeping their future safe and after they regret because everything seems good before it actually come.Thanks for the post with facts.
Reply to comment

Add a Comment

Your Name:
Email Address: (Required)
Make your text bigger, bold, italic and more with HTML tags. We'll show you how.
Post Comment
RSS Follow Become a Fan

Delivered by FeedBurner

Recent Posts

Memory Care Training in All Nursing Homes
Focus Toward Senior Care Development
Sugar: Is is Safe?
The free market & Health care
Stomach Bug Outbreak Grows

Most Popular Posts

Talking Dog for Senior Care
4th of July Events
Stomach Bug Outbreak Grows
Memory Care Training in All Nursing Homes
Medication Management Tips


Food for thought
powered by