Correction to Friday’s Segment on Inflation
Paul Solman: On Friday night’s program, in a story on inflation (you can see the clip below), I reported the following:
“The traditional measure of inflation, the Consumer Price Index, is DOWN over the last year, which may have seniors feeling a bit more flush – until they find out their social security checks are also about to go down, reflecting the lower CPI.”
But I seem to have been mistaken, according to a careful reading of the Social Security Handbook that I requested from retirement economist Larry Kotlikoff of Boston University (and author of the ESPlanner retirement software we have linked to from our Making Sen$e page). We’ll try to have a definitive answer from Social Security itself on Monday, but right now my best guess is that benefit checks, starting in 2010, may well show no increase over this year’s checks, but won’t go DOWN.
There turn out to be other fascinating issues here about how future benefits are calculated and we’re now looking into them. But to all Social Security recipients who may have seen our report, check here before fretting further about upcoming benefit reductions. You may not get any increase in benefits, but it doesn’t seem you’ll be getting a reduction. Truly sorry to have misled anyone.