Thursday, August 10, 2023

Retirement: Social Security's 2024 COLA seen at 3% vs 2023's 40-year high of 8.7%

Social Security's 2024 cost-of-living adjustment (COLA) estimate is 3%, down from the four-decade high of 8.7% in 2023, as inflation eases.

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Retirement

Thu Aug 10 2023
 
Image source: Getty Images. It's hard to imagine what retirement would look like for our country without Social Security. The program lifts millions of senior citizens out of what would be an impoverished existence. At the same time, overall benefits are modest. The average retired worker gets an annual benefit of $16,200 -- hardly enough to replace the income many have become accustomed to living on. But there are five smart ways that you can boost your Social Security benefits...if you start acting now. 1) Wait to claim This is the simplest and most well-known way to boost benefit checks. The full retirement age is currently 66. If you claim at that age, you get your full benefit, which you can calculate here . But you can actually start receiving benefits as early as 62, or as late as 70. If your full monthly benefit at 66 would have been $1,000, here's how it would change based on when you claim.

Social Security's 2024 cost-of-living adjustment (COLA) estimate is 3%, down from the four-decade high of 8.7% in 2023, as inflation eases.

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People walk outside the U.S Capitol building in Washington, June 9, 2022. Most U.S. adults are opposed to proposals that would cut into Medicare or Social Security benefits, and a majority support raising taxes on the nation's highest earners to keep Medicare running as is.
 

The Daily Money: More say why wait when it comes to Social Security

Just 10% of non-retired Americans say they will hold out until age 70 to draw the max from Social Security, leaving cash on the table, a survey says.
Vineel Bhat is a 16-year-old entrepreneur in Sammamish, Wash. who has been involved in investing and financial literacy education for a few years, starting in middle school when he gave free classes at the local library. He started investing as a kid because his father, Thiru Bhat, moved to the U.S. with very little money. He has since released a free iOS App for investing and started an investing club at his school. Vineel invests with Fidelity, a brokerage that allows teens to trade stocks, mutual funds and ETFs.
 

Even a newborn can save for retirement. Here's how with a Roth IRA.

Saving for retirement seems like a daunting task, but you can set your kid up for success with a youth Roth IRA. Here's what it is and how it works.
There really isn't a definition of early retirement. Some people use 62, the age at which Americans become eligible for Social Security. (The payments are higher if people wait to sign on at a later age, but the calculation is personal and is often based on financial circumstances and health.) Other analyses figure early retirement from 59½, the age at which people can withdraw funds from 401K or Roth IRA accounts without taxes or penalties. On the other hand, since 65 is the traditional retirement age, there is a case to be made that people can retire as late as 64 and still fall into the "early retirement" category. ( This is the number of retired people in every state .) One thing is certain. Much of what people need to do to retire early is what they have to do to retire at all. Those who retire early do have to make some plans that might not be as important to people who retire at 70 or later, however. Certainly, those who retire at 62 should plan to live at least another two decades. According to the National Center for Health Statistics' National Vital Statistics System, U.S. life expectancy in 2020 was 77.8 years -- but almost 10% of Americans live to be 85 or older. Remaining healthy becomes a bigger challenge as people age, no matter how early they retiree. Obesity and cardiovascular diseases become larger risks. Older people are more likely to suffer from Type 2 diabetes. Exercise and a good diet are important for everyone, but that importance increases with age. Part of what people need to do is prepare as early as possible for the conditions age often brings. Among these are financial plans for disability. Some people begin to live on a single floor in the anticipation of less mobility. Still others have to do with planning for medical care which may become more frequent as they age. Another part of retiring early has to do with finances. The story is that F. Scott Fitzgerald once said to Ernest Hemingway, "You know, the rich are different from you and me," to which Hemingway reportedly replied "Yes, they have more money." This applies to retirement. People need to fund their lives for at least two decades. That means those of modest means may need to sell their homes to be able to afford retirement. Others may need to move to places with lower costs of living. Consider what it costs to retire comfortably in every state . We looked at what early retirement may require, and here is what we found.
 

Why Americans are claiming Social Security benefits earlier

More Americans plan to claim Social Security benefits for retirement earlier than later, even if it means leaving money behind. Here's why.
A couple taking a selfie.
 

Not so fast. Why you should wait until 67 to file for Social Security.

Most Americans file for Social Security before their full retirement age. Here's why you should wait if you can.
 

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