Social Security benefits are crucial for many individuals in retirement. Regardless of other savings and retirement accounts, the payments can go a long way towards improving quality of life.
Recently announced Social Security benefit increases will be good news for retirees or anybody planning to retire soon.
It Will Increase by 2.8% in 2019
The Social Security Administration announced last month that it will make a major cost of living adjustment for beneficiaries. This will result in a 2.8% increase for Social Security benefits, the largest since 2012.
The increase will benefit more than 67 million Americans who already receive Social benefits or Supplemental Security Income payments. Cost of living adjustments are made to keep benefits in line with inflation, so it is not entirely surprising that a change like this has occurred in a strong and rapidly expanding economy.
Adjustments have been mild in recent years. The largest adjustment of the last decade was made in 2009 when the Social Security Administration announced a 5.8% change.
Social Security is Still Not Enough for Most People to Retire On
Despite adjustments that will increase the value of benefits, retirement experts agree that it is not enough for most people to enjoy a truly comfortable retirement.
Cash savings, target-date funds, and even investments in the stock market should be used to supplement retirement income.
If you are still some years or even decades away from your expected date of retirement, then it is particularly important that you begin your savings plan and opt into a private or employer-backed retirement program.
According to the Social Security Administration, tax revenues will only cover up to 77% of Social Security payment needs by the year 2033. This means that while there may be payment increases today, the government simply cannot sustain its current format.
Great News for the Short-Term, But Retirement Remains a Major Issue for Americans
Anyone in retirement today or planning to retire in the next ten years will likely receive complete Social Security benefits, and there is even potential for more cost of living adjustments.
However, the sustainability in the long-term is regularly questioned by economists and government insiders, which makes private retirement savings more important than ever before. Thinking about your retirement early and making smart investments is the best way to secure your future and your ideal retirement lifestyle.
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