The executive branch has put together a budget proposal for the 2014 fiscal year, and it includes a conversion to a chained CPI to measure the rate of inflation.
This measurement is utilized to determine how much senior citizens will receive as a Social Security cost-of-living adjustment. Expenses rise, and many of these seniors are living on a fixed income so adjustments are relied upon.
To give you an idea about the extent of this reliance, according to the Social Security Administration 23% of elder married couples depend on Social Security for at least 90% of their income. 46% of single seniors are almost entirely reliant on Social Security.
What is the typical Social Security benefit you ask? As of December of 2012 the average monthly Social Security payout was $1262.
This chained CPI would replace the current measuring stick, which is the Consumer Price Index for Urban Wage Earners and Clerical Workers. Using this index there was a miniscule 1.7% increase in Social Security benefits this year to account for inflation.
Using the chained CPI COLAs will become even more modest.
When you digest all this information it becomes clear that Social Security alone is not going to be sufficient if you want to enjoy financial comfort during your senior years.
Depending on your age and your financial capabilities you may well be able to get yourself on track for a comfortable retirement by setting aside resources to augment your Social Security benefit.
If you’re not sure how to go about devising a strategy, you may want to take a moment to schedule a consultation with a licensed retirement planning attorney.
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