Countless Americans rely on Social Security to stay afloat financially in retirement. But for years, enrollees have been struggling to keep up with their living costs. The Senior Citizens League reports that retiree expenses rose by over $119 per month in 2016, yet Social Security’s meager 0.3% cost-of-living adjustment (COLA) that year only put an extra $5 in the average recipient’s pocket, if that. In fact, most beneficiaries didn’t see a boost at all, because a rise in Medicare Part B premiums swallowed that COLA up whole.
It’s therefore somewhat encouraging to hear that Social Security recipients might get a more significant boost come 2018. According to the latest report by the Social Security Board of Trustees, current beneficiaries can expect a 2.2% percent COLA for 2018, which is far better than the 0.3% increase they got in 2017, and worlds better than 2016’s non-existent increase. Additionally, because the latest projections also indicate that Medicare Part B will remain unchanged next year, there’s a good chance seniors will get to keep that $28 in full.
Still, it’s a small victory to celebrate. Based on what the average beneficiary receives today, that 2.2% boost translates to roughly $28 a month for the typical senior. But that’s nowhere close to the $119 a month most retirees need to keep up with their growing expenses.
Furthermore, this COLA is by no means official. Enrollees will need to wait until the fall to hear whether they’ll be getting their hands on that additional $28 a month, and whether their Medicare Part B premiums will indeed hold steady.
And let’s not gloss over the fact that COLAs aside, Social Security is still facing a pretty dire shortfall within two decades’ time. The latest projections confirm what we were already told last year — that without intervention from Congress, the program’s trust funds are set to run dry come 2034, at which point Social Security will manage to pay out only about 77% of scheduled benefits. And for today’s younger retirees who don’t have independent savings, that could spell major trouble down the line.
Take matters into your own hands
Whether you’re a current beneficiary, a soon-to-be retiree, or a younger adult who’s decades away from leaving the workforce, it pays…