The biggest challenge for small businesses in the US right now.
7 de October de 2022
Cheque del Seguro Social aumenta ¿Será suficiente?
21 de October de 2022
Inflationary pressure impacts the Social Security check
One of the most important news for retirees or for those thinking about retirement is that since 1982, the adjustment made in the Social Security check, called “COLA” (Cost-of-Living Adjustment), reached 8.7%.
For those who want to know the maximum amount that the COLA has reached, the following are presented from the first highest amount:
- In 1980 it reached 14.30%.
- Then in 1981 it reached 11.20%.
- And in 1979, where it scored 9.90%.
In the same way, in several years it has been zero, with which the benefit simply remained exactly the same for the following year.
Let’s see the following graph:
In the year 2022, each retiree on average was receiving $1,681; now by 2023 each retiree will receive about $1,827, which means they will get an additional $146 per month. In the case of couples who are receiving these benefits, they will go from $2,734 to $2,972.
If you wish, through the following link you can download directly from Social Security, a summary with all the details of this information: https://www.ssa.gov/news/press/factsheets/colafacts2023.pdf
For those people who are about to retire or are already retired and want to know what is the exact amount of money they are going to receive, always remember to check your Social Security account through the following address: https://www. ssa.gov/myaccount/
Fundamental questions
Some of you may be asking yourself the following two fundamental questions:
- When will I start receiving this new amount? As of January 2023, the more than 65 million Social Security beneficiaries will begin to receive this pension adjusted to 8.7%.
- If I still don’t want to retire, do I lose the benefit of this increase? The simple answer is “No”. Those who are of minimum retirement age need not worry; since, when they request it, the amount will already be adjusted to the COLA of each year.
How is the Social Security COLA (Cost-of-Living Adjustment) calculated?
Before explaining how the COLA is calculated, it is interesting to look at history, to learn that the main objective of this adjustment is to ensure that the purchasing power of this benefit is not eroded by inflation.
In 1975, this adjustment methodology began. Previously, this amount was only increased when Congress issued a special law to modify it.
Its calculation is done as follows:
- The inflationary index called CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers) is taken, which, as its name implies, measures the variation in prices for urban workers.
- Not all the months of the year are taken, but the variation that the quarter of this year had versus the quarter of the previous year is compared, or what is the same, it is seen how much the number for the months of July, August and September 2021, versus those same months of this year 2022.
- The variation obtained is the COLA for the next year, in this example for 2023.
Many experts on the subject have pointed out that it is not correct to use an index that changes prices for active workers when adjusting the amount that retirees will receive, under the premise that the expenses of those who are retired are different. to the workers; Therefore, they point out that the Consumer Price Index for the Elderly, or CPI-E, should be used.
What other changes will occur in the Social Security check in 2023 due to this new COLA?
For many of us, either because we are not retired or because we are Hispanic immigrants, we do not know what other modifications this change in the COLA generates. Below, we point out some of them:
- Increase in the amount of each credit: In order to qualify for Social Security benefits, about 40 credits must be obtained, each year a person can accumulate about 4 credits and to earn each credit they must generate about $1,510 that year for their work in the year 2022 and by 2023 that amount rises to $1,640.
- For those who are not retired and earn more than $160,201: you will not pay Social Security taxes on the amount that exceeds this amount in 2023, read carefully that we say for the amount that exceeds that amount, we are not saying that yes you earn less you will not pay. For the year 2022 the amount was $147,001.
- Increased amount for disabled people: The average amount goes up in 2023 to $1,483 from $1,364 in 2022.
The big question will this COLA increase be enough?
To answer this question, we have to divide this approach into two fundamental parts:
1. According to a report published by The Montly Fool, where they analyze the way people who are retired consume versus what they are still working on and we can see the following points.
- According to the Bureau of Labor Statistics’ Consumer Price Index, the items that have had the greatest increase have been: Food with 10.9%, gasoline with an exorbitant figure of 44% and prices for public services or utilities with 19% .
- The five categories where money goes to retirees is precisely in: housing, transportation, health, food and public services; so we can see that the impact on retirees has been very strong
- Although for next year Medicare has announced that by 2023, it will lower the amount paid in Part B premiums, by 3% on average according to CNBC, people in retirement also spend Co -insurance and other expenses not covered.
2. These points confirm that the situation is not being easy at all for those who are already in their golden years, which for many may not be golden at all. Although it is true during the year 2022, the COLA or adjustment to the Social Security pension was 5.90%, it is also true that inflation, as we saw for each of the pensioners, is being much higher and they will have to finance the 2022 expense from their savings or investments until the increase in the 2023. The good thing is that many economists predict that the year 2023, although it will continue to be a complex year at an economic level, it is expected that inflation will begin to fall, which adds to the high consumption that we continue to see in the economy and the strength of the labor market.
Conclusions
In conclusion, as we have explained on other occasions, this information should serve as a lesson for those people who are working, to maximize their savings and investments, taking advantage of the tax benefits that individual retirement accounts such as 401K, IRA and Roth IRA, they can offer them in order to achieve their financial independence and be able to live their golden years to the fullest and without limitations.
34 Comments
Thanks for the sensible critique. Me and my neighbor were just preparing to do a little research about this. We got a grab a book from our local library but I think I learned more clear from this post. I am very glad to see such fantastic info being shared freely out there.
excellent points altogether, you just gained a new reader. What would you recommend about your post that you made some days ago? Any positive?
What’s Going down i’m new to this, I stumbled upon this I’ve discovered It absolutely useful and it has helped me out loads. I am hoping to give a contribution & aid different customers like its aided me. Great job.
you’ve got a fantastic blog right here! would you prefer to make some invite posts on my weblog?
I would like to thnkx for the efforts you have put in writing this blog. I am hoping the same high-grade blog post from you in the upcoming as well. In fact your creative writing abilities has inspired me to get my own blog now. Really the blogging is spreading its wings quickly. Your write up is a good example of it.
Terrific work! This is the type of info that should be shared around the web. Shame on the search engines for not positioning this post higher! Come on over and visit my web site . Thanks =)
Hello There. I found your blog using msn. This is a really well written article. I’ll make sure to bookmark it and return to read more of your useful information. Thanks for the post. I will certainly return.
You made certain nice points there. I did a search on the issue and found nearly all people will go along with with your blog.
Appreciating the dedication you put into your blog and in depth information you provide. It’s good to come across a blog every once in a while that isn’t the same old rehashed information. Great read! I’ve saved your site and I’m adding your RSS feeds to my Google account.
Thanks a bunch for sharing this with all of us you really know what you’re speaking about! Bookmarked. Kindly additionally consult with my web site =). We may have a hyperlink alternate agreement among us!
You should take part in a contest for one of the best blogs on the web. I will recommend this site!
Perfectly composed content, thank you for selective information. “Life is God’s novel. Let him write it.” by Isaac Bashevis Singer.
This really answered my downside, thanks!
Some genuinely nice and utilitarian info on this site, also I believe the pattern holds great features.
Enjoyed looking through this, very good stuff, thanks. “It is in justice that the ordering of society is centered.” by Aristotle.
Appreciate it for this post, I am a big fan of this website would like to go along updated.
I have learn a few excellent stuff here. Definitely worth bookmarking for revisiting. I surprise how so much effort you set to make any such great informative website.
Real great info can be found on site. “Often the test of courage is not to die but to live.” by Conte Vittorio Alfieri.
It is truly a great and useful piece of info. I¦m glad that you simply shared this useful information with us. Please stay us informed like this. Thanks for sharing.
Hello! I simply would like to give a huge thumbs up for the nice data you could have here on this post. I shall be coming again to your blog for more soon.
I’ve been absent for a while, but now I remember why I used to love this web site. Thanks , I¦ll try and check back more often. How frequently you update your website?
Simply desire to say your article is as amazing. The clarity in your post is just great and i can assume you’re a professional in this subject. Well along with your permission allow me to seize your RSS feed to keep updated with approaching post. Thanks one million and please keep up the gratifying work.
Appreciating the persistence you put into your site and in depth information you present. It’s nice to come across a blog every once in a while that isn’t the same unwanted rehashed material. Great read! I’ve bookmarked your site and I’m including your RSS feeds to my Google account.
Very efficiently written story. It will be beneficial to anybody who usess it, as well as me. Keep doing what you are doing – for sure i will check out more posts.
I got what you intend, thankyou for putting up.Woh I am thankful to find this website through google.
Hi my loved one! I wish to say that this article is awesome, great written and include approximately all significant infos. I would like to see more posts like this .
I was very pleased to find this web-site.I wanted to thanks for your time for this wonderful read!! I definitely enjoying every little bit of it and I have you bookmarked to check out new stuff you blog post.
Spot on with this write-up, I actually think this website wants way more consideration. I’ll most likely be once more to read far more, thanks for that info.
Thanks so much for giving everyone an exceptionally special opportunity to read in detail from this website. It is often so nice and packed with amusement for me and my office fellow workers to search the blog at minimum three times every week to learn the latest guides you will have. And of course, we’re at all times astounded with all the amazing opinions served by you. Some 4 facts on this page are truly the most efficient we have all ever had.
I genuinely enjoy looking at on this site, it holds fantastic posts.
I do not even know how I ended up here, but I thought this post was great. I do not know who you are but definitely you are going to a famous blogger if you aren’t already 😉 Cheers!
You got a very great website, Gladiolus I observed it through yahoo.
Good – I should definitely pronounce, impressed with your web site. I had no trouble navigating through all the tabs as well as related info ended up being truly easy to do to access. I recently found what I hoped for before you know it in the least. Reasonably unusual. Is likely to appreciate it for those who add forums or something, site theme . a tones way for your client to communicate. Excellent task.
You could certainly see your enthusiasm in the work you write. The world hopes for even more passionate writers like you who are not afraid to say how they believe. Always go after your heart.