Seniors and Retirees Can Breathe Easier in 2023
Highest COLA (cost-of-living adjustment) in over 40 years
As we head towards 2023, and the cost-of-living keeps increasing, things have looked worrying for many older Americans. Things are getting more expensive the world over and the United States is no different. The Bureau of Labor Statistics recently announced the Consumer Price Index increased by 8.2% in September, compared with a year ago.
It is comforting to know that amid such uncertainty older Americans will get a much-needed hand. We set social Security recipients to receive the highest COLA in over 40 years in 2023.
If you are retired and rely on your Social Security, what will come is welcoming news to find out that the annual cost-of-living change will be 8.7% next year the highest increase since 1981. This in effect will boost retirees' monthly social security benefits by $146 to an average of $1827.
As the price of goods and services goes up, it is essential to make sure that American retirees can keep up with inflation. Setting the money aside for years with a specific goal in mind is fine, but when inflation strikes and market forces come to bear, things can change pretty rapidly.
“Planning for your retirement isn’t easy when it comes to inflation but it shouldn’t be risky either.” says Richard Eden Senior vice president of David Lerner Associates, “Trying to look into the future using a crystal ball is impossible, but you can minimize risk by using a sensible middle ground of investing.”
Seniors will also get another welcome bit of help next year. Medicare part B premiums will drop in 2023. This is the first time in over 10 years that they’ll be paying less than they were before, according to the Center for Medicare and Medicaid Services. It’s a historic moment, given that it is only the fourth time since they created Medicare in 1965 that premiums will go down from the previous year instead of remaining the same or increasing.
Unfortunately, as great as this news is, the Senior Citizens League research found that inflation has caused Social Security payments to lose 40% of their buying power over the last 22 years. Their study found that their monthly benefits would have to increase by $540 for them to maintain the same level of buying power they would’ve had in the year 2000.
Speak to an investment counselor about the best way to build up a retirement fund that will stand the test of time. A sound retirement strategy can provide financial security down the line.
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