For Mark Roberts’ Use: A few months ago, we blogged about the Social Security Cost of Living Adjustment (COLA) for 2017, which at the time was expected to be nonexistent. Experts were predicting that Social Security would not release a COLA in January, and that benefits checks would remain the same.
Now, it looks like there will be an adjustment, but only a very slight one. The current benefits hike is expected to be 0.2 percent, which is quite a bit less than in most years. These are still projected numbers, based upon inflation during the third quarter of the year. If that figure comes in higher or lower than we expected, then the 0.2 COLA could still be adjusted up or down. The takeaway lesson here is that we don’t expect much variation from that 0.2 percent figure.
On the other hand, some Medicare recipients could see a sharp increase in their premiums. This increase will only affect beneficiaries in the higher income brackets, and those who don’t have their Medicare Part B premiums deducted from their Social Security checks. Everyone else will see a very small increase in premiums, amounting to about $2.70 per month.
As always, these announcements are a good reminder that we should all prepare for the unexpected in retirement. Social Security benefits are often adjusted upward to account for the rising cost of living, but that calculation always depends upon the Consumer Price Index. If inflation is calculated near zero, then benefits checks won’t such much or any increases. This is true even when the cost of medical care, which affects seniors more than any other group, continues to rise.
We can help you plan for a stable retirement income, and show you ways to prepare for unexpected medical expenses as well. Give us a call, and we’ll sit down and talk about your retirement income plan.