Next 3 Months Are Crucial for Social Security Recipients - The Motley Fool & AMAC
July, August, and September are crucial for anyone receiving Social Security benefits. That’s because the consumer spending data from only those three months are used to calculate the inflation rate. This then determines what the cost of living increase (COLA) will be on January 1st. If prices rise 2% in this upcoming third quarter over the third quarter last year, then that is the “raise” recipients will get. But the purpose of COLAs is to help seniors on Social Security retain their buying power in the face of inflation. In other words, a COLA keeps you from falling behind. You never really get ahead. Savings, pensions, and investments have always been intended and expected to provide the additional income to allow retirees to enjoy a fruitful retirement, one more than merely existing. Though COLAs are calculated automatically, they’re not guaranteed. In the past 11 years, there were three years in which seniors received no raise at all because prices were stagnant or declined. Note benefits can never be reduced, though. The announcement of any COLA will be made in mid-October. Read Maurie Backman’s full piece in The Motley Fool here.