Next year will bring a 5.9% increase to Social Security recipients–the largest jump in 39 years.
Of course in many cases increases in the cost of goods and services will eat up the large increase, but some of us adjust our cost of living when prices skyrocket so it is nice to get the large increase and then leave it up to us to spend it wisely. I will say it has been a long time since I have seen this type of increase to my income.
Of course this all assumes the government has the money (which we know they really don’t) to pay out this increased amount.
15 thoughts on “Big Social Security COLA Jump”
Income investors and expected higher yields:
Here’s an opinion piece I saw as news next to the stock Z on Fido.
Have too remember that Medicare premiums will increase proportionally, so the net S>S> payment
will be less than stated.
Howard–yes you are correct. I think Medicare goes up by $10 for next year.
This is a welcome increase but in reality just a small portion of the actual cost of living increase we have witnessed the past year or more. I have seen many small items (under $10) go up in price by 30, 40 and 50% the past few months. The cost of having a nice meal in a restaurant has ballooned in my area.
Again, I want to thank Tim for all his hard work on this site along with my fellow commenters. I am able to keep ahead of the curve with income producing investments and that allows me to sleep well.
More than I expected. a ittle less tha real Inflation.
I just hope they don’t decide to means test for social security like they do with IRMA in Medicare. Why don’t they ever run out of money for Welfare only Social Security and Medicare??
Well, az, speaking only personally, you understand, I’d much rather be in a financial situation that required means testing than one where I qualified for Welfare.
I do worry that means-testing is in the future for SS and so will not wait to 70th birthday to start receiving the monthly check.
I don’t understand why you call IRMAA means testing. It’s a progressive income tax, just like the taxation of Social Security benefits. If you want to see means testing, look at SSI and Medicaid.
The reason why welfare programs don’t have trust funds like Social Security is that there’s no obvious appropriate population to pay into them. Social Security is a kinda-sorta retirement program, so it makes sense that employed workers pay into the trust funds. Of course we all know it’s not quite that simple.
SS is NOT an investment plan. It’s a TAX paid by workers to benefit retirees. The promise that you’ll get your turn on the backs of younger workers is what leads to the lie that it’s an investment.
I agree with you Martin the SS is not an investment plan. It operates more like a ponzi scheme – paying current retirees with money taxed from current workers.
I also worry about potential means testing of SS down the road – hence right now my plan is for my wife to start taking her SS in 2 years at 65 – and I will do the same in 4 1/2 years. We don’t need it so not going to take a big discount to take at 62 – but also not going to wait til full retirement age, or worse age 70
Excellent point that no politician states that welfare benefits will have to be cut by thirty percent or more as the government often reminds us that funds are running low for social security benefits. When you look at the computation for many middle class people who have worked for 35 years or more, paid into the system a healthy amount matched by their employers, there is ABSOLUTELY NO REASON to cut their benefits. If you look at the calculation for social security, the benefits pay at moderate levels only thirty two cents for every dollar earned and then go down to ten cents for every dollar earned. On top of that, a huge number of seniors take a forty percent discount taking benefits at 62 years of age (8 percent discount each year for 5 years is the calculation). Contrast this to public workers in California (police, fire, many others) who earn three percent per year of their highest salary x years worked (33 years x 3% =99%). Thus, government retirees can earn almost one hundred percent of their highest salary for the rest of their lives as soon reaching 33 years of service (start at 21 retire at 54 and earn 99 percent of your highest check). Thus, there are numerous government workers in California making four to five times or more than the average social security check of about $1400 per month.
Thus, there is a long history of paying seniors who are not government workers very little in contrast to their government pensions. Why? Because the majority of seniors are not organized, unaware of their own benefits, and do not focus on how to group together to organize a fix this unfairness like public employee unions focus on this issue. The result of this mess is that senior women have huge poverty rates even though they have worked at fair paying jobs all their life. Men are dying earlier due to lack of funds for adequate care and the depressed nature of living with little money.
As an attorney and cpa in the health care industry, I witness the tragedy of lack of money every day when it comes to seniors. This will get much worse as assisted living care is needed. The politicians do not address this mess but instead take their healthy retirement benefits.
IRMA makes a person pay higher medicare premiums. However, social security benefits are also subject to federal and possibly state taxes based on the amount of social security that you receive. Here are the federal rules: If you file as an individual, your Social Security is not taxable only if your total income for the year is below $25,000. Half of it is taxable if your income is between $25,000 and $34,000. If your income is higher than that, up to 85% of your benefits may be taxable. Bottom line is your benefit is reduced in both circumstances.
HalleluJAH! About time for a decent raise. Too bad inflation is going up along with it. Oh well, I have a low mortgage rate and, being retired, don’t have gas guzzling daily commute$ any longer.
Ron: I am 73 and retiring in January myself. No house payment, no loans of any kind and thanks to Tim and other folks on this website, I have an ample amount of dividends from Preferred’s and BB’s to help keep the wolves away.
I like to run marathons so training in the morning instead of after work is a dream come true for me 🙂