Social Security Service May Get Worse

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Despite a large increase in its budget for 2023, the Social Security Administration has admitted that service to beneficiaries seeking out help will not improve for most of this year—and in some areas, it will deteriorate, according to the AARP Bulletin.  Areas which are supposed to get worse are getting help on the 800 number and getting a decision on disability benefits.  The SSA got a 6% increase in its budget for 2023, which gives it $14.1 billion to spend.  But the agency says that most of that money is already spent and it doesn’t think customer service will improve until fiscal 2024.

Social Security Pressured By Congress To Improve Service

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After a flood of customer complaints which have gotten even worse following pandemic-related shutdowns, the Social Security Administration, SSA, is under intense pressure from Congress.  Leaders of the House Ways and Means Committee wrote a letter to acting SSA commissioner Kilolo Kijakazi which said, in part, “Many people, some of whom are elderly…have had to wait more than six hours to get help. …People have had to come back multiple days to get service.â€Â  Those who called faced a similar situation with much longer than average wait times.  “Agency-wide, we are at our lowest staffing level in 25 years, driven by years of insufficient funding,†Social Security spokesperson Nicole Tiggemann said in an email to AARP.

 

It’s Official : Social Security Payments To Rise By 8.7% In 2023

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The Social Security Administration announced that starting in January, Social Security checks will increase by 8.7%, the largest cost-of-living COLA increase since 1981.  The increase will benefit 70 million Social Security recipients benefits which will go from $1,699, on average, to $1,814.  This will be welcome news for those who have been struggling with high inflation.

Social Security Checks Projected To Go Up Up 8.7% In January

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According to an estimate by Mary Johnson, a policy analyst for the Senior Citizen League, an advocacy group, Social Security Payments could see the largest increase since 1982 in 2023.  That’s the good news.  The bad news is that inflation is still very high so the 8.7% increase may not mean much as far as purchasing power goes.  For the average retiree who currently gets a check for $1,656, the cost-of-living hike would bring them an additional $144.10 a month in 2023, making the average payment $1,800.

 

Social Security Payments Could Rise 9.6% in 2023


The CPI which Social Security Payments are tied to is up 9.1% over the past 12 months.  If inflation remains at the current level, on average, over the next two months (the CPI increase is announced following the release of September data) Social Security payments would rise 9.6% in 2023, according to estimates from the nonprofit Senior Citizens League.  This organization advocates for protecting and strengthening Social Security and Medicare benefits.  The best case scenario for seniors is that we see high inflation for the next two months and then a big cooling.  That would lock in the CPI increase but inflation would no longer be at that high level.  (Source: Wall Street Journal August 11, 2022, A3).

Social Security Payments To Leap In The Double Digits Come January

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Social Security payments are expected to rise by more than 10% next January given the soaring inflation that we have experienced.  Mary Johnson, policy analyst at The Senior Citizens League, cautions that this number may be too high, particularly if inflation cools later in the year.  The best case scenario : A huge increase in January while inflation cools to a reasonable level in 2023.

Inflation Soars To Level Not Seen Since 1981

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U.S. consumer inflation hit 9.1% last month, a rate that we have not seen in more than four decades.  There’s good news and bad news here.  Seniors will get the biggest increase in Social Security than they have seen in decades.  And if you own your own home, you will be in a better financial situation than those who are renting because, as long as you have a fixed-rate mortgage, your payments won’t go up.  The biggest cost increase right now is gas, up 11.2% from the previous month and up 60% from a year ago.  This is followed by groceries, which are up 12.2% from a year ago.  Let’s hope that the Federal Reserve can get this economy back on track.

How To Maximize Social Security Benefits

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Many people make the mistake of taking Social Security as soon as possible rather than their normal retirement age.  This can have a huge negative financial impact if you live a long life.  If you are in good health, most financial planners tell you to wait until you are 70 years old in order to maximize your benefits.  The Wall Street Journal regularly writes a report on various financial questions, one of the latest from a 64 year-old who was planning on waiting until she turned 68 before filing for Social Security.  However, she is thinking of taking it now because the huge cost-of-living (COLA) increase which will likely come next January.  Glenn Reffenach of the Journal wrote, “Not to worry.  Actually you already are qualifying for these adjustments.  The Social Security Administration on its website spells out how a person’s benefits are calculated and how COLAs, in specific, fit into that calculation.  Here’s the wording:

You are eligible for cost-of-living benefit increases starting with the year you turn age 62.  This is true even if you don’t get benefits until your full retirement age or age 70.â€

In essence, your Social Security benefit is recalculated each year even if you haven’t filed for benefits yet.

Social Security Trust Fund Running Dry, Congress Should Act Sooner Rather Than Later : By Derek Baine

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According to a Pew Research poll, roughly half of Americans younger than age 50 believe they won’t receive any Social Security benefits.  However, that’s unlikely to be the case.  It’s true, we haven’t had a surplus in the Social Security Trust Fund since 2010 and if nothing is done in the next couple of decades there would have to be cuts in Social Security benefits.  The current date for that is 2034.  However, this would be a big political fiasco for anyone in office at the time, so politicians are likely to act well before that happens.  Hopefully they will raise payroll taxes.  However, another option they have is to keeping raising the year in which you retire.

https://www.forbes.com/advisor/retirement/how-to-save-social-security/?tid=newsletter-dailydozen&utm_source=newsletter&utm_medium=email&utm_campaign=dailydozen&cdlcid=607e1442fe2c195e916f3bb4

Big Boost In Social Security A Mixed Blessing

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Many seniors have been elated to read in the paper that their Cost of Living Adjustment (COLA) in their Social Security Payments is likely to rise more than 6% come January.  However, before you get too excited, news just broke that inflation in the U.S. hit a 31 year high in October at 6.2%.  “It increasingly appears that the COLA for 2022 will be the highest paid since 1983 when it was 7.4%,†Mary Johnson, Social Security policy analyst for the Senior Citizens League, told AARP Bulletin (October, 2021 P4).  The increase in 22021 was only 1.3% and over the past 10 years it has increased by 1.7%.  Let’s hope inflation rates decline next year!