Social Security’s Declining Purchasing Power

According to reports from the Senior Citizens League, Social Security’s purchasing power has dropped by 30% since 2000, basically as a result the program’s cost-of-living adjustments’ inability to keep pace with inflation in categories particularly critical to seniors. This situation is largely attributable to Social Security Administration’s use of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as explained in a post by The Motley Fool’s Sean Williams. CPI-W is geared toward the spending categories of working-age Americans, rather than the demographic most dependent on Social Security benefits–retirees. In recognition of the problem, there are two avenues of thought being pursued, one calling for a more senior-friendly calculation process (CPI-E) that weights factors more relevant to seniors, and one calling for the use of a “substitution” approach (Chained CPI) intended to align COLAs more closely with inflation-affected shopping habits. Williams’ article discusses the impacts of both approaches…check it out here…

The debate over CPI-E and Chained CPI aside, AMAC has long advocated an approach designed to solidify COLA expectations for America’s seniors. As part of it’s Social Security Guarantee legislative framework proposal, a guaranteed annual adjustment would be awarded to seniors on a “tiered” basis, with lower income Social Security recipients receiving a higher amount and higher income beneficiaries a lower amount, but all being guaranteed an annual increase in benefits. This recommendation is part of a multi-faceted proposal, which you can learn more about at


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