Newsweek Features Facet Insight on the Latest Social Security Cost-of-Living Adjustment (COLA)
Newsweek quoted Senior Lead Planner, Patrick Sabol, CFP® on how retirees can adjust their daily cash flow to make the most of the latest Social Security adjustment.
The adjustments have softened the impact of the rising costs we’re all seeing every day, but they haven’t 100 percent solved for inflationary pressures, so many retirees’ purchasing power has slipped. If retirees don’t have other income to rely on, they will likely have to cut costs somewhere in their budget to stay whole.
Because the COLA is a percentage increase, retirees who already receive higher benefits will see the biggest raise in dollar terms. But since those retirees often had higher earnings during their careers and, in many cases, saved more in 401(k)s and IRAs, they may not rely on the COLA as much. Unfortunately, retirees with lower benefits and lower earning histories will see smaller dollar increases, even though they tend to depend on Social Security the most. They’re the ones most likely to keep facing financial strain.