- Tel: 561-686-6200
- Fax: 561-686-0303
Each year, the Social Security Administration (SSA) announces how much it plans to increase the amount of monthly Social Security retirement benefits to keep the amount of benefits on pace with nationwide increases to costs of living. For 25% of all Social Security recipients who are 65 or older, the monthly benefit checks constitute 90% of their income, meaning that these increases have a huge impact on their monthly budgets. The recently-announced Cost of Living Adjustment (COLA) for 2017 is especially modest, and it’s causing concern among Social Security recipients. Additionally, Medicare premiums are also expected to rise a substantial amount in 2017, negating the modest increase in benefits recipients are scheduled to receive.
The slated COLA increase for the 65 million recipients of Social Security benefits nationwide is 0.3%. For the average recipient, this will mean that their monthly checks in 2017 will increase by just $5, to a total of $1360. COLAs have been low for the past few years, ranging between SSA offering no COLA, and adjusting the COLA up by 2%.
Not only will Social Security benefits rise by such a modest amount, but Medicare premiums are scheduled to increase, as well. For Medicare beneficiaries who are either enrolling in Medicare Part B for the first time in 2017, who receive Medicare benefits but do not receive benefits from Social Security, or who pay higher premiums related to income, premiums are expected to rise by roughly 22%, about $149 per month. Such beneficiaries constitute about 30% of all 56 million Medicare beneficiaries.
According to a study conducted by Allianz Life Insurance, 47% of Americans indicated that they are either “very concerned” or “terrified” of the effect of rising costs of living on their retirement plans. Many point to the index used to determine an adequate adjustment to the COLA. While the government uses the CPI-W, which excludes the spending habits of those 62 and older, experts suggest that the index crafted to highlight the costs faced by the elderly known as the CPI-E would be more appropriate. That index would have provided a 2.1% COLA increase for 2017 by offering more weight to costs like housing and medical care. In order to ensure that you are as well-equipped as possible to afford retirement and long-term care, speak with an elder law attorney who can help you plan ahead for your golden years with thoughtful long-term care and Medicaid planning.
For assistance in Florida with creating a long-term care and asset protection plan, and help with other end-of-life legal issues, contact the seasoned and diligent West Palm Beach elder law and estate planning attorneys at Shalloway & Shalloway for a consultation, at 561-686-6200.