Social security could be cut by 20% amid financial crisis
Social Security beneficiaries are at risk of a 20% cut in benefits in 2034, according to the report. released by the Ministry of Finance
The board said the Social Security Trust Fund will begin to run out of money by 2023 unless Congress takes action.
Program costs are projected to exceed total annual income in 2023 as COLA grows significantly.
But Kiroro Kijakazi, acting director of the Social Security Administration, believes there will be time for future funding to be replenished.
“Informed debate, creative thinking and timely legislative action will help Social Security continue to protect future generations,” he said at a recent Social Security Administration (SSA) meeting. statement.
The Social Security Trust Fund will decrease by $22 billion in 2022 to a total of $2.8 trillion.
Alternative Retirement Options – Roth IRA
A second great way to save for retirement is to pay a Roth IRA.
Employers do not contribute to these funds, but having a Roth IRA account along with a 401K has some advantages.
You can invest up to $6,500 if you’re under 50 and up to $7,500 if you’re over 50 each year.
This money may be tax-free in your Roth IRA, and money you withdraw when you retire is tax-free.
You can also withdraw your donation early without penalty.
How to save for retirement: 401k
About 67 million retired Americans receive Social Security payments each month, but those checks don’t make up the bulk of retirement income for most individuals.
Most of your savings will likely come from your 401k, an employer-sponsored retirement plan.
The biggest advantage of a 401k is that your pay is matched up to a percentage by your employer.
This match is determined by your employer, but some companies offer up to 5% of each salary.
In short, your employer will give you free money towards your 401K as long as you invest a portion of your salary yourself.
Many experts suggest investing about 15% of your total income in your 401k.
Many experts suggest investing about 15% of your total income in your 401k.
Senate passes bill to increase COLA for veterans
The Senate passed a bill last week that would increase coverage rates for veterans with service-related disabilities and military survivors.
The law seeks to increase certain benefits from the Department of Veterans Affairs in line with annual cost-of-living adjustments to Social Security benefits.
This year’s COLA growth rate was 8.7%, the highest in 42 years.
Affected benefits may include Disability and Dependent Compensation, Dependent and Compensation Compensation for Survivors, and Clothing Allowance.
If the bill passes the House and is signed by President Joe Biden, it will go into effect on December 1, 2023.
US cities with the highest inflation
With a cost of living adjustment (COLA) of 8.7% in 2023, retirees in some cities are feeling more inflation-stricken than others.
research by wallet hub We compared the cost of living in 22 metropolitan areas to 2022 levels.
The results may surprise you.
Here are the top 5 cities with the highest inflation:
- Tampacent. Petersburg, FL – Clearwater – 8.9%
- Phoenix, Arizona – Mesa – Scottsdale – 8.5%
- Seattle, Washington – Tacoma – Bellevue – 8%
- Dallas-Fort Worth-Arlington, TX – 7.5%
- Riverside – San Bernardino – Ontario, CA – 7.3%
Cities with the lowest inflation include more expensive areas such as Los Angeles, California and Honolulu, Hawaii.
Largest cost of living adjustment (COLA) increase since 1981
COLA is up 8.7% this year. This is his biggest adjustment in 40 years.
The last time we saw an increase in retirees was in 1981 under Ronald Reagan.
The COLA was set at 11.3%, following a spectacular 1980 spike of 14.3%.
The 1980s began with two recessions in three years, after nearly two decades of what economic historians called the “Great Inflation.”
Federal Reserve policy in the mid-1960s and early 1980s allowed excessive growth in the money supply, sending prices across the consumer retail index skyrocketing.
After 1982, inflation began to decline, returning to a steady level of less than 5% per annum.
