For Mark Roberts’ Use: Each fall, Social Security releases an expected cost of living adjustment (COLA), which takes effect on January 1 of the following year. And each fall, seniors who live on a fixed income anxiously await this news, so they can prepare their budgets and make any necessary adjustments. With the cost of healthcare and other expenses rising, most seniors depend upon these annual boosts to their income. And yet, in some years that boost never arrives.
Social Security does indeed issue a COLA during most years, but the adjustment to benefits is never guaranteed. Looking forward to 2017, we know that 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. In other words, it is possible that seniors won’t receive an increase in their benefits, or that the increase could be quite small as compared to many previous years.
If you’re currently planning for retirement, you should pay careful attention to this news. Remember that benefits increases are never guaranteed, even if your own expenses rise from one year to the next. This underscores two important aspects of retirement planning.
First, do everything you can to maximize Social Security benefits. Working beyond full retirement age can result in larger benefits checks, as can creative filing strategies commonly utilized by married couples.
Aside from working toward a larger Social Security check, you should also remember that the program was never meant to provide for your full retirement income. Since COLA is never guaranteed, you should take special care to ensure that some other form of retirement income does indeed account for inflation.
We can show you different ways to max out your Social Security benefits, as well as planning for another form of retirement income such as an annuity. For more information on the rising cost of living, and to learn ways to offset inflation, give us a call. We can help you plan for a more secure retirement, so that you don’t have to lean too heavily on your Social Security benefits.