Retirees and the Fiscal Cliff

Jan 18, 2013

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Though the fiscal cliff has been temporarily delayed, nothing has changed for retirees. That’s according to Ed Coyle, Executive Director of the Alliance for Retired Americans

He says despite the progress that was made, the biggest question that still remains is what is Washington is going to do between now and early March. 

Coyle says there are a lot of ideas floating around, most of which are bad for seniors. He says Social Security, Medicare and Medicaid are all major targets for cuts. 

Coyle says legislators need to be reminded that Social Security has nothing to do with the deficit.

"Any cut in Social Security will do nothing to bring down the deficit because Social Security is funded by the payroll tax people pay every paycheck that they get.  It doesn’t come out of the deficit by law.  It is a 1% overhead operation, probably the most efficient program the government has ever run, in terms of delivery of the service and the low overhead which is next to nothing.”

Coyle says the Alliance is especially concerned by a recurring policy proposal called the chained-CPI.  If approved, the policy would change the way cost of living increases are considered. 

He says that means over a 10-year period, retirees would be receiving $4,000-$6,000 less in Social Security checks than they would if the program remained unchanged. 

Coyle says seniors and those expecting to retire within the next five years need to be the most concerned.