It is no surprise that the average cost of living adjustment on Social Security benefits has averaged a measly 1.2% over the last eight years while Medicare Part B premiums have averaged an increase of more than 10% during that time frame.1
Easy math- the cost of health insurance and out of pockets expenses is making those Social Security checks worth less and less. According to a report released last month from a nonpartisan advocacy group called the Senior Citizens League, “Medicare Part B premiums [are] expected to grow two to three times faster than the rate of Social Security benefits…”1
These premiums are expected to increase nearly 5% over the next ten years according to the Medicare trustees forecast, while health-care spending in general would increase an average of 7.4% per year over the next decade. The Congressional Budget Office anticipates the Cost of Living Adjustment (COLA) on Social Security benefits to be only 2.4% per year on average. That would mean cost-of-living adjustments would probably have to double, and increased Medicare premiums would need to slow down drastically in order for Social Security benefits to be worth a hill of beans.1
Here in the northeast, with our higher cost of living, many retirees know they may not be able to count on their Social Security check for more than part of their retirement income. With increasing Medicare premiums and inadequate COLAs, that income is becoming smaller and smaller.
Here I go again sounding like a broken record, but in my opinion, planning for guaranteed lifetime income shouldn’t be a choice- I think it is a necessity. Are you prepared?
It never hurts to revisit your plan and perhaps adjust your thinking. We are here to help, so give us a call at (732) 364-5462 or send me an email at email@example.com
- Mary Beth Franklin, Investment News, March 20, 2018, Social Security benefits losing buying power, http://www.investmentnews.com/article/20180320/FREE/180329997/social-security-benefits-losing-buying-power, Accessed May 31, 2018.
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