Ouch!

The National Bureau of Economic Research Digest included a summary of a study titled “How Well Are Social Security Recipients Protected from Inflation”. The conclusion was not encouraging. Looking back over a long history of SS recipients that authors found “For men born in 1918 who began receiving benefits at age 65…in 1983, [there was] a decline in real purchasing power of almost 20% [by 2007]. Women born in 1918 saw there average Social Security benefit, net of out-of-pocket medical expenses, decline by almost 27 percent.” The point is that practitioners need to think twice before making the assumption that SS is fully indexed for the inflation risks our retired clients will face.

%d bloggers like this: