The media asked me about the new 2013 adjustment to Americans’ Social Security. Today the announcement came in, as expected, at 1.7%.
As most people know, last year the adjustment was 3.6% and the previous two years were 0%.
I have 3 comments on this cost of living adjustment:
- Most people will see an increase of about $12 a year ($25 at the high end). Yes, this is it. The joke is that Medicare Part B, which is taken out of most peoples’ Social Security monthly payment is going up $7 a month. So, did the cost of living adjustment really work! NOT.
- The cost of living adjustment calculation needs to change. Without going into details the adjustment is based on CPI-W, which does not accurately assess inflation for health care cost for a senior. Unfortunately, this is an area that is not well understood, but I think more Americans are feeling it since the adjustment is not keeping up with inflation.
- Don’t count on the adjustment making up for claiming sub-optimally. You need to make sure you get all the money you are entitled too. Create smart strategy which may find thousands more.
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