Whether you have already retired and filed for Social Security, or you’re still planning for the future, it makes sense to stay informed on issues that might impact those benefits. So, it might interest you to learn that the Social Security Administration has recently announced a cost of living adjustment (COLA) for all beneficiaries, beginning in January 2018.
The Administration customarily releases these adjustments each year, but the amount of the adjustment can vary significantly. The payment increases are based upon inflation, and are designed to help retirees’ incomes keep pace with inflation. Because the inflation rate has remained extremely low since 2012, COLAs have been small or even non-existent for the past five years.
This year, the COLA for beneficiaries is two percent. That’s not a large increase by any means, but it will mean an extra 27 dollars for the average Social Security recipient. The maximum benefit for a retiree claiming benefits at full retirement age will hit $2,788, an increase of 101 dollars.
With the cost of healthcare continuing to soar, we are hoping this increase will offset rising healthcare expenditures for retirees. Medicare has said that Part B premiums will increase for some people, and of course the price of medications and other medical expenses could climb as well.
Lawmakers will continue to address other problems within the Social Security system. With Baby Boomers continuing to reach retirement age, the budget is strained, and adjustments need to be made to the system. We will continue to keep you up to date on these issues, and other news related to retirement planning. In the meantime, give us a call if you have any questions about your retirement income plan.