On October 13, 2021, the Social Security Administration (SSA) officially announced that Social Security recipients will receive a 5.9 percent cost-of-living adjustment (COLA) for 2022, the largest increase in four decades. This adjustment will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022. Additionally, increased payments to more than 8 million Supplemental Security Income (SSI) beneficiaries will begin on December 31, 2021.1
This is great news for a number of seniors who are collecting Social Security benefits, as the current payments were not keeping up with the continual inflation. Each year there are billions of dollars being lost over a lifetime to seniors not collecting the Social Security benefits they should be allotted. To ensure you are receiving the most from your benefits, it is best to work with your financial advisor in creating a Social Security Optimization plan.
Social Security optimization involves your financial advisor developing a plan based on how much of a role Social Security will play in your overall retirement plan to help ensure you are not leaving money on the table. With this being one of the largest increases to those on Social Security and SSI benefits in a long time, many may find their current retirement plans being impacted. Sage Investment Advisers, LLC in Poughkeepsie, NY focuses on meeting with clients when any changes happen, to ensure that their retirement plans are up-to-date and have their Social Security optimized.
Biggest COLA Increase in Decades?
While many predicted a bump of as much as 6.1% given recent movement in the Consumer Price Index (CPI), the announced 5.9% increase is still substantial. Some fear that rising consumer prices may dilute the impact of the increase with inflation currently running at more than 5 percent. While this remains to be seen, Social Security beneficiaries will no doubt welcome the largest adjustment in many years.1
How You Will Be Notified
According to the Social Security Administration, Social Security and SSI beneficiaries are usually notified about their new benefit amount by mail starting in early December. However, if you’ve set up your SSA online account, you will also be able to view your COLA notice online through your “My Social Security” account.1
If this increase surprises or concerns you, it's always a good idea to seek guidance from your financial professional about changes to any of your sources of retirement income.
Your retirement planner/financial advisor will be the best resource to help you make adjustments to your retirement plan based on what your increase Social Security payments will be. They will also ensure that you are optimizing your Social Security so that you are not losing out on money that you are entitled to. .
Published by Sage Investment Advisors, LLC in Poughkeepsie, NY
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.