The Social Security Administration COLA

The Social Security Administration is set to announce the 8.7% cost-of-living adjustment (COLA). The 8.7% COLA will boost the average monthly Social Security retirement benefit to $1,814 next year, up $145 per month from this year’s $1,669 average benefit. The 8.7% COLA increase is the largest adjustment to the benefit in 40 years thanks to high inflation. And to everyone’s surprise, a decreased Medicare Part B premium comes with it.

Social Security is a benefit nearly 1/5th of the country is currently receiving and the majority of working Americans pay into it. How is something that affects such a large percentage of the population so easily misunderstood and complex? The goal of this article is to deliver the fundamentals of Social Security and develop a much stronger communication with your advisor around the topic. With all that being said, let’s jump right in.

***Our current I-Bonds article has been updated to reflect the new 9.62% composite rate***

What is Taking Place in the Economy and Markets?

If you are currently holding cash that is above the comfort of your emergency fund, you may be stuck in what is called “analysis paralysis”. That is, with extra money to invest, you are holding back as an investor due to uncertainties in markets. A volatile equities market and a low yielding bond market due to low interest rates can do that to you. So, you are keeping money in cash for the time being, all while we are dealing with the highest inflation numbers in 40 years.