Social Security Beneficiaries Might See a Raise Next Year

As the pandemic seems to be cooling off a bit, now your attention might have shifted to inflation. No, it’s not your imagination; prices on a number of essential goods and services have indeed risen over the past year. Some of these increases are quite noticeable and significant, and are probably impacting your budget.

For example, the cost of gas rose by 56.2 percent from May 2020 to May of this year. And, as anyone might have predicted, the cost of food is up too. Milk rose by 7.2 percent, citrus fruits now cost 9 percent more, and the price of bacon inflated by 13 percent.

Of course, not all prices have increased. Some goods, such as ground beef, actually decreased a bit. But overall, the Consumer Price Index does reflect noticeable inflation in many areas.

It’s that inflation that could trigger a cost of living adjustment to Social Security checks next January. While the Social Security Administration won’t announce an increase until October, the Senior Citizens League (a nonpartisan organization that represents seniors) estimates a coming cost of living adjustment of 5.3 percent for 2021.

In fact ,their previous estimate of 4.7 percent, based on data from January to April of this year, has been increased to reflect more recent calculations from the CPI. Will that figure continue to rise? Only time will tell, but we will endeavor to keep you informed.

In the meantime, do remember that Social Security was created to provide a supplement to other forms of retirement income. Cost of living adjustments are important, and do happen in many years (but not every year). But no one should count on Social Security to provide for their entire lifestyle in retirement.

Contact us to learn more about forms of retirement income that keep pace with inflation, so that you never have to depend too much on a single decision each year. We will help you analyze your future income needs and make a retirement plan that suits a real-life budget.