Social Security Beneficiaries Get a “Raise” Next Year

Social Security

Social Security Beneficiaries Get a “Raise” Next Year

Posted by RDW Financial Group
3 months ago | November 7, 2017

Once you’ve retired, living on a fixed income for the rest of your life can be a daunting prospect. What will you do about inflation? What if Medicare premiums increase? What about your own personal expenses, which can fluctuate from year to year?

Social Security was never intended to fully fund your entire retirement. It was conceived as a supplement to other retirement income only, meaning you certainly should not rely upon the payments to completely cover all of your needs in retirement. However, one good thing about Social Security is that the Administration periodically updates payment amounts to help them keep pace with inflation. This can help retirees cope with changing prices over time, while living on various forms of retirement income.

For the past five years, Social Security payments have remained quite steady. Since inflation has been barely measurable in these years, often they do not issue a Cost of Living Adjustment (COLA). When adjustments have been issued during this half-decade, they have been quite small by comparisons with previous COLAs.

So, we have a bit of good news for those of you currently receiving Social Security benefits, or those eyeing an imminent retirement. The COLA for 2018 will amount to two percent of current benefits; it isn’t a lot, but it’s the largest adjustment we’ve seen in five years now.

Just how much is two percent, anyway? For the average Social Security beneficiary, it will equal 27 dollars, or a benefit check of $1,404 per month in 2018. Of course, that is just the average benefit amount; your own benefits might vary considerably based upon your earnings record and the time at which you first filed your claim.

After years of small COLAs, we’re happy to see adjustments picking up a bit of speed. This should help retirees cope with rising prices on medications, food, and other necessities. But of course, you should never depend upon Social Security to fund your entire retirement. So keep in touch with us throughout the retirement planning process, and we can help you identify other potential streams of retirement income.

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