Social Security can be a problem for older adults. Millions of seniors rely on their monthly checks to pay the bills, and for some retirees, Social Security is their only source of income
Retirees living on a fixed income have had to contend with surging inflation. There is a chance that seniors will get a historic raise in the years to come. How much could you get?
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Seniors on Social Security get a cost of living adjustment every year. As inflation naturally rises over time, this yearly boost in benefits is designed to help you maintain your buying power.
Retirees can expect larger cost of living increases when inflation is higher than average. The average cost of living adjustment will fall over time. Senior citizens received a 5.9% cost of living adjustment this year. The raise is almost certain to be even larger.
The Social Security Administration won't release the official number for the cost of living adjustment until October. According to a recent report from The Senior Citizens League, it could fall as much as 9.6%.
It is assumed that inflation will not increase throughout the rest of the year. If inflation goes up, the cost of living could go up as much as 10.1%. Next year's cost of living adjustment could be the highest in more than four decades.
According to the latest data from the Social Security Administration, the average retiree gets around $1,670 a month. A boost of around $170 per month is possible if seniors receive a 9.6% COLA.
Social Security is facing a serious problem due to the fact that benefits are losing buying power.
The annual cost of living adjustments are supposed to keep benefits up to date. They haven't missed the mark in the past. According to a report from The Senior Citizens League, Social Security has lost 40% of its buying power in the last 15 years.
Inflation has increased over the past year. Retirees have lost a lot of buying power despite a huge benefit increase because seniors only received a 5.9% COLA this year.
This doesn't mean that the COLA isn't useful for retirees. Extra money in benefits can make a difference when inflation is high. Even a large COLA will not increase your disposable income.
Keeping realistic expectations can be helpful if you want to fight inflation or help your benefits go further in retirement.
Social Security isn't as reliable as it used to be if benefits continue to lose buying power. It's wise to be realistic about how much money you'll get in the future.
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