Modernizing Social Security: Helping the Oldest Old

IB#18-18

The brief’s key findings are:

  • As life expectancy rises, more retirees face the higher poverty risk associated with very old ages due to declining resources, cumulative inflation, and widowhood.
  • In response, some propose boosting Social Security for the oldest old by either:
    • adopting an annual cost-of-living-adjustment (COLA) for all retirees that more closely matches the spending patterns of the elderly; or
    • raising benefits for those ages 85 and over by a set percentage or a flat dollar amount.
  • An age-85 flat-dollar adjustment is the best way to target those most at risk and has only a modest cost, which could be offset by a very small reduction in the COLA.