Like many Americans, you may be feeling pain from the high cost of living every time you buy groceries or fill up at the pump. Surging food costs and higher gas prices are pinching consumers, especially those living on a fixed income. But, with inflation nearing a four-decade high, we have good news from the Social Security Administration (SSA) about their upcoming cost of living adjustment (COLA). Experts anticipate that it might be the biggest increase since 1981!
The Senior Citizens League estimates that the COLA increase for 2023 could be 9.6%, based on consumer price index data from July. This adjustment would result in a $159 monthly benefits increase for the average retiree. However, the actual percentage amount could be higher or lower than 9.6%, depending on whether inflation increases or decreases in the coming months.
The COLA increase for 2023 is expected to be announced by the SSA on October 13, after the release of September’s consumer price index data. Additionally, there’s a possibility that Medicare Part B premiums may not go up much next year (an announcement should be coming around mid-November).
It’s important to remember that while Social Security plays a significant role in financial planning, it was never intended to be the sole source of retirement income. Instead, it should supplement other primary retirement savings sources like a 401(k). So while the COLA increase comes as welcome news to retirees (helping to offset higher prices for just about everything), it’s essential to have a comprehensive financial plan in place. Without a plan, it can be challenging to account for all the variables impacting your nest egg.
It’s natural to become concerned about having enough money in retirement, especially when it doesn’t seem to go as far as it used to. Rest assured, we consider factors like inflation when building strategies designed to keep your financial plan on track. If you feel uncertain, give us a call any time. We’re happy to discuss your specific situation.