Social Security and the Consumer Price Index for the Elderly

Abstract

Some argue that social security benefits should be adjusted using a price index that reflects the spending habits of the elderly rather than those of workers. This study suggests that if such an index were adopted today, over the next forty years benefit levels would increase and the social security trust fund could become insolvent up to five years sooner than projected.

Keywords: inflation, elderly, consumer price index, social security, indexing, cost of living

JEL Classification: J14, E31