Social Security and the Poverty Problem
In the wake of the recently-announced 2019 Social Security cost-of-living adjustment (COLA), many seniors are breathing a sigh of relief over the largest increase in seven years. But while that’s a good thing, MarketWatch columnist Paul Brandus, in a post on www.marketwatch.com, suggests that there’s a downside in that COLA, after all, is tied to inflation, meaning that the additional benefit is not necessarily incremental in terms of seniors’ standard of living. In essence, he likens it to a treadmill, with seniors for the most part running in place.
Brandus’ article also references a Schwartz Center for Economic Policy Analysis at the New School conmcluding that “about 40% of middle-class Americans will live close to or in poverty by the time they reach age 65.” The report on this study explains that a more realistic measure of the poverty level is necessary to put the issue in perspective, and explains that the absence of personal savings and pension plans facing many future retirees has the likely effect of making Social Security a primary source of livelihood for these folks in their retirement years. This latter point, Brandus notes, is at odds with Social Security’s design intent.
The MarketWatch post concludes with conjecture on Social Security’s looming insolvency, describing it as a “wildcard” and raising the question of what the potential for a 21% cut in benefits would mean to an already precarious poverty situation for many seniors.
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