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What do the recent Social Security Cost of Living Adjustments (COLAs) mean for retirement preparedness?

Posted on Nov 01, 2011 by  in 401(k) Retirement Planning, Changes in the Law: What You Should Know, In the News, Retirement Health Check-up, Retirement Readiness

Keep your nest egg safe for retirement

Without depending on Social Security, are you saving enough to be retirement ready?

On October 19th, the Social Security Administration announced that Social Security recipients would see the first cost of living increase since 2009.  While this is undoubtedly welcome news to Social Security recipients, according to a story by CBS’s moneywatch.com, the increase only amounts to an additional $39 per month for an average Social security recipient who receives $13,000 per year.  Although this modest increase will help, the story goes on to say that it will do little to offset the increasing out-of-pocket cost of health insurance for seniors, which have increased by 14% during the last two years.

This stark reality should serve as a reminder to the rest of us who have not yet reached retirement that we really need to take our own retirement planning seriously.  For the vast majority of Americans, Social Security will only cover a small portion of their retirement income needs.  Cost of living increases in Social Security will likely never keep pace with the combined increases in medical and living expenses as we grow older.

What are you doing now to prepare for a dignified retirement? Are you retirement ready?

 

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