FA Center: Can Social Security keep pace with high inflation? Maybe not, but you can still fight back.

by | Mar 22, 2023 | Stock Market

Regardless of your age, you may wonder if Social Security will survive as long as you do. Recent reports indicate Social Security trust funds might be barreling toward insolvency by 2033. But there’s a more immediate threat: While U.S. inflation remains high, Social Security’s annual cost-of-living adjustment (COLA) may not keep pace with rising prices. That leaves some retirees worrying that the 8.7% COLA for Social Security recipients in 2023 is not enough to offset steep hikes in the goods and services they buy.

In any given year, it’s hard to predict in January how the inflation rate will evolve over the next 12 months. Cost-of-living increases — the amount added to benefits for Social Security beneficiaries — typically are announced in the fall for the year ahead, making projections even trickier. For example, the retiree COLA calculation for 2024 will be set in October 2023. The calculation will be based on the Bureau of Labor Statistics release of the September 2023 consumer price index for urban wage earners and clerical workers (CPI-W). If you receive Social Security payments, you may be concerned that these annual increases are …

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