Whether you’re retired or looking forward to it, we all know life is a game of staying ahead financially.
Buying and spending, saving and investing, waiting and watching — it’s all par the course until we finally walk away from the workforce. But even then, there’s the matter of making sure your retirement is secure in line with your lifestyle and the state of the economy.
We here at NORA thank our readers for making 2022’s record Social Security Cost-of-Living-Adjustment (COLA) happen. While we’re excited about the rumored 2023 Social Security COLA that could break the previous year’s record, it’s important to examine whether this boost will really be enough.
Is Inflation Already Threatening Next Year’s COLA?
Just like we spend our whole life measuring our income, savings, and returns against our expenses, bills, and taxes, so too do we here at NORA analyze COLAs in relation to current prices.
While the 2022 COLA broke records at 5.9 percent, next year’s increase could be in the range of 8.6 percent. Though retirees deserve every bit of that boost, we have to consider how it stands up to modern prices.
With consumer inflation already up to 8.5 percent as of this publication, it’s clear that prices have already caught up to the benefit before the boost has even gone into effect. But there’s a bigger problem — some people say that this rate doesn’t tell the whole story of inflation, and the costs we’re paying are actually higher.
Prices Keep Climbing, So Social Security COLAs Should Too!
Producer inflation is often pegged higher than consumer inflation -—and since the cost of producing goods is always passed onto the customer, this metric could be called more accurate. Don’t forget about higher costs for Medicare premiums, and higher inflation in sectors like healthcare where retirees tend to spend more money.
With prices continuing to rise, we’ll continue to campaign for seniors to get fair yearly COLAs adjusted for inflation and reimbursement for years skipped. If you support this cause as well, be sure to follow us on Facebook and Twitter, and sign our petition here.
