How High Inflation Impacts the Future of Social Security, Ep #104

<p>In October of every year, the Social Security Administration announces the cost of living adjustment for recipients starting that will go into effect in January the following year. So when they announce it in 2022, it will go into effect in January of 2023.</p> <p>Last October, they announced that the cost-of-living adjustment was 5.9%. The number they land on depends on their calculation of inflation <em>at that time</em>. I imagine that the adjustment they land on will be higher than last year. I’m estimating it to be somewhere between 7–9%.</p> <p>While this means that Social Security recipients will see an increase in their benefits, it will negatively impact what they will receive in the future. How? Learn more in this episode of the Retirement Made Easy podcast. </p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[1:02] Submit your questions at RetirementMadeEasyPodcast.com</li> <li>[2:02] Three steps to take to create your dream retirement</li> <li>[4:36] Don’t forget that Medicare Part B impacts your Social Security Benefit</li> <li>[7:10] How inflation impacts the average person’s benefits</li> <li>[10:38] How the income cap on FICA taxes will impact the trust fund</li> <li>[13:23] Why the cost-of-living adjustment is a double-edged sword</li> </ul> <h2>Don’t forget that Medicare Part B impacts your Social Security Benefit</h2> <p>Medicare Part B will be announced in November. In 2021, it went from $145 a month to $170 a month—a 14.5% increase—for the <em>lowest</em> earners. When you’re looking at your Social Security statement and it says your benefit is $1,200—don’t forget that Medicare Part B is deducted from your benefits. It’s automatically withdrawn once you turn 65. So if you started with $1,200 a month you’d end up with $1,030 remaining. Your Social Security benefit estimates are NOT the number you’ll actually receive.</p> <h2>How inflation impacts the average person’s benefits</h2> <p>As of April 2022, according to the <a href= "https://www.ssa.gov/" target=