Alert
Close

We’re Giving Away $50,000! Enter Now. See Official Rules

AARP Bulletin

Chained CPI Change Could Hit Veterans' Benefits

Cost-of-living increases will have an impact on more than just Social Security

A proposed formula to calculate cost-of-living adjustments for Social Security and other federal benefits — called the "chained CPI" (C-CPI) — would save money for the government, some budget experts say. But it would also take a disproportionate toll on one group — disabled veterans.

Sign up to read stories of real people making a difference

AARP calculates that a 30-year-old veteran of the Iraq or Afghanistan war who has no children and is 100 percent disabled would likely lose about $100,000 in disability compensation by age 75 (calculated in today's dollars), compared with benefits under the current cost-of-living formula. Over a 10-year period, 23 million veterans would lose $17 billion in compensation and pension benefits, according to AARP calculations.

The C-CPI would also reduce benefits for current and future retirees, costing the average 65-year-old nonveteran retiree about $3,900 in Social Security benefits by age 75.

The Congressional Budget Office says the C-CPI would rise about 0.3 percentage points less each year than the current consumer price index measure. Proponents of C-CPI "grossly underestimate the impact of what may seem like little nicks over time," says AARP senior legislative representative Timothy Gearan.

Also of Interest

See the AARP home page for deals, savings tips, trivia and more

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

TODAY'S NEWS

Advertisement

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

member benefit aarp financial service auto insurance

AARP® Auto Insurance Program from The Hartford offers members no-cost quotes.

membership benefit financial college aarp

Advice on saving for education from AARP® College Savings Solutions from TIAA-CREF.

AARP Credit card from Chase

Members can earn 3% cash back on purchases with the AARP® Credit Card from Chase.

Member Benefits

Join or renew today! Members receive exclusive member benefits & affect social change.

Advertisement