Will Social Security Issue a COLA Next Year?

Filed under: Retirement

Happy retired senior couple ready for driving car on weekendEach fall, those drawing Social Security benefits look forward to the annual announcement regarding the cost of living adjustment (COLA). With COLA taking effect the following January, seniors living on a fixed income hope for a benefits increase of a few percent each year. This slight increase in checks helps retirees afford healthcare and other services as prices rise.

If you’re looking forward to that announcement this fall, or just keeping an eye on the state of Social Security as you plan for your own retirement, you might find this news disappointing. As of now, the Board of Trustees of the Social Security Trust Funds has already said that next year’s COLA could range between 0 and 0.7 percent. That means seniors might not receive a COLA at all, or the bump in benefits could be tiny by comparison to most years.

If you’re already retired, this news is probably pretty disappointing. But those planning for retirement should also pay attention to COLA trends. Even as prices on some goods and services rise, Social Security does not always issue a benefits increase. That’s why you should pay attention to two important aspects of retirement planning.

First, plan to do everything possible to ensure a larger Social Security benefit. Work up until your full retirement age, or even longer if you can. For each year that you continue working, your eventual benefits increase by about 8 percent. Married couples can also utilize certain creative filing strategies to increase their checks.

Second, remember that Social Security was never meant to supply all of your retirement income. Plan carefully for another form of income, ideally one which increases each year to keep pace with inflation.

We can show you how to maximize your Social Security benefits, while also planning for other forms of retirement income. Call us to schedule an appointment, and we can help you plan for a secure retirement, so that bad news from Social Security hopefully will not cause you too much alarm.

If you would like more information or have specific questions, please contact us using the following form. We would be happy to assist you.

This information has been provided by a licensed insurance professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting the insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, trust and estate, or investment advice. Infinite Wealth Advisors is not an investment advisory firm.  Investment Advisory Services provided by NAMCOA® – Naples Asset Management Company®, LLC, a federally registered investment advisor, website: www.NAMCOA.com .