Now that we have the official announcement of all the Social Security changes for 2023, it’s time to highlight those which will be most impactful to retirees.
These changes include:
For clarity, let’s examine each of these individually.
The Social Security cost of living adjustment has been a hot topic in the news lately.
If you do a quick internet search for the term “Social Security” you’ll find that more than half of the articles are covering the forecasts of the upcoming benefits increase.
It’s no wonder: The upcoming cost of living adjustment will likely be the fourth largest in the history of Social Security.
As interest in this topic has grown, individuals are learning more about how these increases are calculated. And not everyone is happy about it.
Many of the comments I’ve been seeing claim that the numbers are rigged and that the increase in the cost of living won’t even be close to inflation because the numbers will be adjusted explicitly for the purpose of lowering the annual increase.
Some of this skepticism comes from the time period used in how the cost of living adjustment is calculated. While we have the inflation numbers that come out every month, it’s ONLY the months of July, August, and September that are counted for the annual increase to Social Security.
According to some, inflation goes down during those three months, then goes back up again. They suggest that if we used the entire 12-month period of data, we would get a more accurate cost of living adjustment and a larger increase.
So today, I want to tackle this head-on and look at the historical data to answer this question once and for all.
If you’re like most people, you’ll need Social Security retirement benefits to help you make ends meet in your golden years. That’s why it’s so important to understand the rules for these benefits.
Unfortunately, if you don’t know how the retirement income program works, you actually could find yourself inadvertently losing some of the money you were expecting.
To make sure this doesn’t happen to you, there are four situations you need to know about that could lead to a temporary or permanent reduction in your retirement income from the Social Security Administration.
Many Americans look forward to the time when they’ll be able to claim Social Security benefits. After all, receiving a guaranteed income for life from the government may seem like an ideal way to fund an enjoyable retirement.
The reality, however, is that Social Security benefits may not be as generous as you think. And you could end up in dire straits if you over-rely on them as a retirement income source.
To make sure you don’t end up suffering financial insecurity in your later years due to a misunderstanding about the role that Social Security will play in funding your future, you need to know these four harsh truths about the benefits you’ll get in your golden years.
Social Security is one of the most important government programs ever created as it has single-handedly kept millions of seniors out of poverty. Unfortunately, it’s also a complicated program that many people don’t know the intricacies of.
Not only are many Americans in the dark about some major Social Security realities, but millions have also bought into falsehoods about this benefits program that could end up costing them.
You don’t want to make decisions based on inaccurate assumptions, only to learn the truth too late, so read on to make sure you haven’t fallen for any of the following four common myths and misconceptions
For many seniors, Social Security makes retirement possible. But while benefits help sustain you, it’s important to have a realistic idea of how far they’ll go and how decisions you make impact the support they offer.
It’s difficult to change course after claiming Social Security, so before you retire there are five facts you must know to make informed choices.
Deciding when to claim Social Security is always complicated because there are many complex rules affecting how much income your benefits will provide.
For married couples, however, making the best choices regarding retirement benefits becomes even more challenging because of special rules that apply to spouses.
If you’re currently married and you or your spouse are contemplating starting retirement benefits, here are four key rules you should know first that could affect the money coming into your household during your later years.
Seniors have the option to get their first Social Security check when they’re as young as 62. But, many people wait much longer — sometimes until age 70 for their first payment.
Why would you put off getting money from the Social Security Administration if you’re eligible for it? The simple reason is that the longer you wait to claim monthly payments, the higher each one will be.
That’s because every retiree has a full retirement age when they must file to get their standard benefit. Claiming before this FRA will shrink your monthly payment while waiting until after it will increase it. Full retirement age is between 66 and 67 depending on when you were born. Starting checks before this age could reduce payments as much as 30% due to early filing penalties, while waiting raises the amount of your monthly check by 8% for each year of delay.
If you are eligible for a survivor benefit from a deceased spouse (or ex-spouse), you need to know about a strategy that can supercharge your Social Security benefits.
This can be powerful if you learn how to use it.
Up until 2016, switching between Social Security benefits was possible through several popular filing strategies. For example, an individual could file for spousal benefits and later switch back to their own benefits. This strategy would allow this person to collect a benefit while waiting on their own benefit to grow with the 8% per year delayed retirement credits.
After some law changes in 2016, most of these Social Security filing strategies were eliminated. One of these strategies, however, is still in place, and it benefits those who are eligible for survivor benefits.
While the average Social Security benefit in 2022 is just $1,657, the maximum benefit is a whopping $4,194 per month.
Since there’s huge variation in the income retirees can receive from Social Security, it’s important to understand how decisions over your life affect the money you’ll receive. Specifically, here are four important factors that determine the amount of Social Security benefits you’ll end up with.