A new Census report released today (PDF) shows that women were a whopping 82.8 percent of all people who were age 100 and older. Social Security has been there for these women and their families for almost all of their lives. But both current and future centenarians have reason to worry about a stealth cut to Social Security benefits by changing the way the cost-of-living adjustment (COLA) is calculated for Social Security.
What does it mean to live to 100? People turning 100 in 2012 have witnessed a lot of amazing events. Four states have entered the union – New Mexico and Arizona the year they were born and Alaska and Hawaii when they were 47. Humans landed on the moon for the first time when they were 57. And when they were 23 – right when they entered the workforce – Social Security was created. That means many of today’s centenarians paid into Social Security their whole working lives – and have relied on it for many decades as well. This reliance is particularly true for women, who are the majority of elderly Social Security beneficiaries – and especially very old beneficiaries. A new Census report released today (PDF) shows that women were a whopping 82.8 percent of all people who were age 100 and older. Social Security has been there for these women and their families for almost all of their lives.
But both current and future centenarians have reason to worry about a stealth cut to Social Security benefits by changing the way the cost-of-living adjustment (COLA) is calculated for Social Security. The annual COLA is a vital feature of Social Security that helps keep benefits from being eroded by inflation. One proposal being discussed as part of the year-end fiscal talks would base the COLA on the “chained Consumer Price Index” (chained CPI), a lower and less accurate measure of inflation which would reduce the annual COLA and cut the value of benefits year after year. The longer you receive benefits, the deeper the reduction from the chained CPI – meaning that the very oldest Americans, 4 out of 5 of whom are women, would be hit the hardest.
This is what would happen to the typical single elderly woman with a monthly benefit of $1,100 who claims Social Security at age 65 and lives to be 100 under the chained CPI compared to current law:
- Her benefits would be 10.5 percent lower.
- This cut would slice the value of her benefit to $984 a month by 100.
- The cut is equivalent to the loss of two weeks’ worth of food per month.
These cuts aren’t just numbers on a balance sheet – they have real impact on women’s lives. The chained CPI targets the oldest old – and that’s no way to balance the budget.