Don’t get too excited about the $145 raise to your Social Security benefit.
The raise is really just to help cover the costs of inflation.
Social Security: Here’s why most retirees fall short of the maximum benefit
Why am I getting the raise?
When most people retire, they depend on Social Security income in some way. With millions of Americans dependent on this income, what they’re getting isn’t enough. That is when the cost-of-living adjustment (COLA) comes into play. Each year, you may get more money to offset inflation.
Right now, inflation is around 8.3%, and there are a variety of factors that influence that number. Inflation is expected to continue rising for a while. The 2023 COLA could reach 8.6%. This will be the biggest nominal-dollar raise in history.
At first glance, an additional $145 a month seems pretty exciting. However, the raise is to offset the fastest growing inflation for the past 22 years.
Since 2000, COLAs have cumulatively risen by 64%, but senior expenses have increased 130%. Even though the $145 increase to Social Security benefits could be a reality for 2023, it’s not necessarily a good thing.
What is the earning limit to still qualify for SSI and SSDI?
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