Latest news with #TheSocialSecurityAdministration
Yahoo
18 hours ago
- Business
- Yahoo
Social Security's 2026 COLA Forecast Was Just Updated. Here's How Much Benefits Could Increase and Why It Might Not Be Enough.
Key Points The latest Social Security COLA estimate is higher than projections from previous months. However, the projected Social Security benefit increase might not be enough for many retirees. The $23,760 Social Security bonus most retirees completely overlook › Retirees won't know how much higher their Social Security benefits will be in 2026 until mid-October. But that doesn't mean they can't at least have a clue what the increase might be. The Senior Citizens League (TSCL) recently updated its forecast for the 2026 Social Security cost-of-living adjustment (COLA). If you're a retiree, here's how much your benefits could increase based on the nonprofit organization's estimate -- and why it might not be enough. The latest COLA estimate The Social Security Administration (SSA) calculates the annual COLA using an inflation metric called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The agency determines the percentage increase (if any) of the average CPI-W during the third quarter of the current year compared to the average CPI-W during the third quarter of the previous year. In July, the CPI-W rose 2.5% year over year. If this rate of increase remains steady, the 2026 COLA would be 2.5%, exactly the same as the benefit increase retirees received this year. However, TSCL doesn't think the CPI-W rate of growth will remain the same. The nonprofit seniors advocacy group uses a statistical model that includes inflation, interest rate, and unemployment data to estimate the next COLA. The organization issues a new COLA prediction each month. Its estimated COLA has steadily risen over the past three months as inflation has inched higher. In May, TSCL projected that the 2026 Social Security COLA would be 2.5%. Its announced an estimated COLA in June of 2.6%. TSCL's latest COLA forecast, released last week, was 2.7%. Not enough? Will a 2.7% Social Security benefit increase be enough for most retirees? Probably not. TSCL recently conducted a survey that found nearly two-thirds of seniors weren't satisfied with the amount of their monthly Social Security benefits. Even more strikingly, a whopping 94% said they thought the 2025 COLA of 2.5% was too low to keep up with inflation. TSCL Executive Director Shannon Benton doesn't think a 2.7% COLA will correct this issue. She stated last week: "With the COLA announcement around the corner, seniors across America are holding their breath. While a higher COLA could be welcome because their monthly benefits will increase, many will be disappointed." Part of the problem lies with the inflation metric the COLA uses. The CPI-W doesn't focus specifically on expenses incurred by seniors. Some argue that the metric doesn't accurately reflect retirees' spending and the higher prices they incur, especially with healthcare. Another factor is timing. Retirees pay higher costs before the COLA intended to offset those higher costs goes into effect. What can retirees do? It's entirely possible that the 2026 Social Security COLA won't be enough to cover the higher costs that retirees incur. What can they do to address this issue? Perhaps the least popular alternative is to watch expenses even more closely. This could be difficult for many seniors who already pinch their pennies to make ends meet. For those in this group, take advantage of any government program that can reduce costs, such as the Medicare Part D Extra Help program for individuals with limited income. Retirees with access to other income sources, such as IRAs and 401(k) plans, might need to withdraw more from those accounts to cover their higher cost of living. Talk to a reputable financial planner first, though, to ensure the retirement accounts won't be depleted too quickly. Some seniors might consider working part-time to boost their income enough to make up for an insufficient Social Security COLA. However, this won't be an option for everyone. For retirees seeking a broader solution to the underlying problem, consider advocating for a change to how Social Security COLAs are calculated. TSCL's survey found that 96% of seniors favor reforming the COLA calculation, with the most popular solution being replacing the CPI-W with an inflation metric that better reflects seniors' spending. Calling congressional representatives is one way to push for such changes. The $23,760 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Social Security's 2026 COLA Forecast Was Just Updated. Here's How Much Benefits Could Increase and Why It Might Not Be Enough. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
17-07-2025
- Business
- Miami Herald
Social Security's 2026 COLA on track to break a 29-year trend
On July 15, 2025, the Bureau of Labor Statistics released the latest CPI numbers. That's a really boring sentence, but the numbers are actually extremely important and should be very interesting to Social Security retirees. That's because the Consumer Price Index for Urban Wage Earners and Technical Workers (CPI-W) is used to determine the Cost of Living Adjustment (COLA) that retirees will receive in 2026. That's better known as the annual Social Security benefits increase, or the raise that Social Security retirees get in most years. Don't miss the move: Subscribe to TheStreet's free daily newsletter The Social Security Administration looks at changes to a basket of goods and services that is included in the consumer price index. The average changes to CPI-W are calculated in the third quarter of the year, and that's the raise retirees get on their Social Security benefits. Since the June numbers are the first ones to be released from this third quarter's data, they provide a very important glimpse into what next year's raise may look like. And based on those numbers from July 15, the 2026 Social Security COLA is on track to do something it has not done in 29 years. The July CPI data showed that the Consumer Price Index rose 2.7% on an annual basis, while the CPI-W numbers showed a 2.6% year-over-year increase. While it's the CPI-W numbers on which COLAs are based, experts are also making projections for what the CPI numbers will look like for the next two months, which are also included in the benefit calculation. Related: Millions of Medicare beneficiaries could see major price shock Based on those projections, the Senior Citizens League has predicted a 2.6% benefits increase next year, up from the 2.5% raise predicted last month. Independent Social Security and Medicare policy analyst Mary Johnson, however, is projecting a 2.7% bump. Regardless of which of these is right, however, the COLA is about to buck a 29-year trend. That's because, for the first time since 1996, the COLA is going to be above 2.5% for five consecutive years. This is a once-in-a-generation shift for today's retirees, and it is not something that most people will probably see again in their lifetime. If the COLA comes in as projected, Social Security is going to hit a major milestone. For the first time since 1996, retirees are going to see a COLA that has been equal to or above 2.5% for five years running. Here's what the recent COLAs have looked like: 2021: 5.9%2022: 8.7%2023: 3.2%2024: 2.5%2026: 2.6% or 2.7% (projected) And the last time the COLAs had a five-year streak where they were at 2.5% or higher was from 1993 to 1996. Here were the COLAs during that time period: 1992: 3.0%1993: 2.6%1994: 2.8%1995: 2.6%1996: 2.9% That period in the 1990s was actually part of a decades-long streak of high COLAs due to high inflation. Since that time, however, there has not been another five-year period when raises were so high. In fact, there were several years in the mid-2000s when COLAs were under 1.00%. Related: Jean Chatzky sends strong message on 401(k)s, Social Security While it may seem, in theory, that five years of raises are good for retirees, that's very much not the case. In fact, this has been a tough period for seniors due to the significant inflation resulting from the fallout of the Covid pandemic. High inflation is not good for people on a fixed income with conservative portfolios, which fits the description of most retirees. More on retirement: Dave Ramsey offers urgent thoughts about MedicareJean Chatzky shares major statement on Social SecurityTony Robbins has blunt words on IRAs,401(k)s Still, seniors on Social Security can expect a record-breaking raise this year. Hopefully it will be the last one that's so high as inflation comes under control. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
19-05-2025
- Business
- Miami Herald
Scott Galloway sends major message on Medicare, Social Security
As they prepare for retirement, American workers frequently wrestle with concerns about their financial stability in later years. Many worry about the rising costs of health care and the long-term viability of the federal Social Security program. Although Medicare becomes available to Americans at age 65, it does not cover all medical expenses, requiring retirees to budget for additional costs. Author and New York University professor Scott Galloway shares his perspective on the significance of Medicare and Social Security in shaping Americans' retirement security. Don't miss the move: Subscribe to TheStreet's free daily newsletter The Social Security Administration (SSA) explains that Social Security functions as a social insurance program that provides retirees with lifetime benefits, adjusted for inflation. And Medicare is also a major source of stability for Americans preparing for retirement. Traditional Medicare includes hospital insurance through Part A, though recipients must cover deductibles. Part B provides coverage for outpatient services and preventive care, with a monthly premium of $185 in 2025. Seniors also have the option of Medicare Advantage, or Part C, which is managed by private insurers. This plan generally offers the same benefits as Parts A and B, plus additional coverage. Medicare Part D is designed to help with prescription medication costs, which can vary widely depending on an individual's health care requirements. Related: Shark Tank's Kevin O'Leary makes bold prediction on U.S. economy However, Galloway argues that there is a fundamental flaw in the way some of these benefits are allocated. He believes that some current recipients of Social Security may not actually require financial assistance but continue to receive it. In fact, Galloway notes that senior citizens today are the wealthiest generation in history. Galloway, who says he has an annual income of $16 million, believes that individuals with significant wealth, including himself, should not receive Social Security benefits. He advocates for the implementation of means-testing to determine eligibility for monthly payments. "Somewhere between 10% and 30% of people who get Social Security right now should not receive it because they don't need it," he said. "The wealthiest generation in the history of this planet are senior citizens." Means-testing is a process used to assess whether a person qualifies for financial assistance based on their income and assets. This evaluation aims to ensure that Social Security payments are directed toward those who need them most. More on retirement: Dave Ramsey sends strong message to Americans on 401(k)sShark Tank's Kevin O'Leary warns Americans on Social SecurityScott Galloway sounds the alarm on Social Security, boomers Galloway highlights the fact that most recipients withdraw two to three times the amount they contribute through taxes. He argues that the wealthiest individuals should not automatically receive benefits solely because they have paid into the system. He views Social Security taxes as a means of funding benefits and believes the money should be directed toward people who truly require financial assistance. Related: Scott Galloway makes major prediction on world economy; 401(k) impact seen The Medicare tax rate stands at 2.9%, with the cost divided between employers and employees. Unlike Social Security, Medicare taxes have no income cap, meaning higher earners face an increased tax rate. Scott Galloway highlights how Medicare's tax structure differs, emphasizing that it continues to be applied across all income levels. Many states also impose payroll taxes, though these tend to be relatively low and have defined limits. No matter the income bracket, payroll taxes remain unavoidable - even affecting wages funneled into a 401(k). For self-employed individuals, the burden is even greater, as they must shoulder both the employer and employee portions, totaling over 15% on the first $160,000 of earnings. On retirement savings in general, U.S. workers acknowledge the value of tools such as 401(k) plans and IRAs, even when economic conditions present challenges. Contributing to an employer-sponsored 401(k) plan is an effective way to build retirement savings, particularly when employers provide matching contributions. With automatic deductions taken directly from wages, this method promotes consistent saving without requiring additional effort, offering both simplicity and efficiency. In 2025, the maximum contribution limit for 401(k) plans has risen to $23,500, an increase from $23,000 in 2024. Additionally, workers aged 60 to 63 can now make larger catch-up contributions of up to $11,250, compared to the $7,500 limit for those aged 50 to 59. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
14-05-2025
- Business
- Yahoo
Spousal Social Security Benefits: 3 Things Married Couples Must Know in Retirement
Spouses with no work history can collect Social Security benefits based on the work record of their retired partner. Spouses that claim Social Security at full retirement age will receive a benefit equal to 50% of their retired partner's primary insurance amount. Divorced spouses can collect Social Security benefits based on the work record of their ex-partner in certain situations. The $22,924 Social Security bonus most retirees completely overlook › The 2024 Social Security Survey from Nationwide Retirement Institute identified prevalent and problematic knowledge gaps on the topic of spousal benefits. 30% of surveyed adults incorrectly marked this statement as false: Social Security may offer benefits for your spouse or children. 53% of surveyed adults incorrectly marked this statement as false: If you are divorced, you may be eligible for Social Security benefits based on your ex-spouse's record. Those knowledge gaps could lead to financial mistakes. Here are three things married couples should know about spousal Social Security benefits. Social Security retirement benefits are available to retired workers and spouses, even when the spouse has no work history. Spouses can claim Social Security based on their retired partner's earnings record, so long as the following conditions are satisfied. The spouse and partner must have been married for at least one full year. The spouse must be at least age 62 or have a qualifying child in their care, meaning a child that is under age 16 or receives disability benefits. The retired worker on whose earnings record the spouse claims Social Security must themselves be receiving retirement benefits. Importantly, some spouses will be eligible for retired-worker benefits based on their own earnings record and spousal benefits based on their retired partner's earnings record. In that case, the spouse is automatically awarded the higher amount when they apply for benefits. How much benefit income a spouse receives from Social Security depends on their claim age and their retired partner's primary insurance amount (PIA). The term PIA refers to the benefit a retired worker receives if they start collecting Social Security at full retirement age (FRA), which is age 67 for anyone born in 1960 or later. At most, the spousal benefit will equal one-half of the retired worker's PIA. But spouses must claim Social Security at FRA to receive that amount. Spouses that claim Social Security earlier will receive a smaller payout, meaning less than 50% of their retired partner's PIA. The precise reduction depends on how many months early benefits start, but it would be most severe at age 62. The chart below shows the spousal benefit (as a percentage of the retired worker's PIA) for anyone born in 1960 or later. Claim Age Spousal Social Security Benefit 62 32.5% 63 35% 64 37.5% 65 41.7% 66 45.8% 67 (FRA) 50% Data source: The Social Security Administration. Note: The percentages shown above represent spousal benefits as a percentage of the retired partner's primary insurance amount. There is another important distinction between retired-worker benefits and spousal benefits. Retired workers can earn delayed retirement credits that increase their benefit amount if they start Social Security after FRA. Spouses cannot earn delayed retirement credits, so there is no advantage to claiming any later. Put differently, spouses maximize their payout by claiming Social Security at FRA. Importantly, an individual eligible for Social Security as a retired worker and a spouse cannot simultaneously collect the spousal benefit while accruing delayed retirement credits on their retired-worker benefit. When someone in that position applies for Social Security, they automatically apply for both types and are awarded the larger benefit. Divorced spouses can still collect Social Security benefits based on the work record of their ex-partner, so long as the following conditions are satisfied. The divorced spouse must be at least age 62 or have a qualifying child in their care. The divorced spouse and ex-partner must have been married for at least 10 years. The spouse must not be remarried, and they must have been divorced for at least two years. There are a few points of possible confusion. First, spouses cannot usually typically collect Social Security benefits on a partner's earnings record unless that partner is already receiving benefits themselves. But that rule does not apply to divorced spouses. Second, divorced spouses that remarry can no longer collect benefits based on their ex-partner's work record, but that rule does not work in reverse. Whether the ex-partner has remarried has no bearing on the divorced spouse's ability to collect Social Security. Third, some divorced spouses worry that claiming Social Security on the work record of their ex-partner will impact that person's benefit, or else that their ex-partner will be notified if they apply for benefits. Neither is true. The ex-partner's payout does not change, nor will they be notified if their former spouse claims Social Security on their work record. If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known could help ensure a boost in your retirement income. One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these Motley Fool has a disclosure policy. Spousal Social Security Benefits: 3 Things Married Couples Must Know in Retirement was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-04-2025
- Business
- Yahoo
Experiencing issues with your Social Security payments? Michigan AG seeks information
Michigan residents who may be dealing with issues regarding their Social Security now can file a form with the state to share their experience and help identify ongoing issues, Michigan Attorney General Dana Nessel announced Friday. Due to a reshaping of The Social Security Administration (SSA) by the Trump administration, recipients have reported a number of challenges, including delays in receiving earned benefits, difficulty contacting customer service, and disruptions in claim processing, according to the Michigan AG's office. 'Social Security supports millions of people across our state,' Nessel said in a news release. 'Reports of disruptions to these benefits, directly caused by the Trump administration's reckless decision to fire employees with no regard for the consequences, are unacceptable. By collecting accounts from residents, my office can track trends, identify recurring issues, and better advocate for Michigan residents who rely on these essential benefits.' Officials said they may share the information collected for future "federal" action, but will not share personal identifying information without consent. The form is on the Department of Attorney General's website. As of December 2023, 1,686,000 individuals received Social Security payments in Michigan. The Social Security Administration's Chicago regional office lists 48 Michigan sites, including: Adrian Alpena Ann Arbor Battle Creek Bay City Benton Harbor Big Rapids Cadillac Chesterfield Clawson Dearborn Detroit - Conner Detroit 7 Mile Detroit - Downtown Detroit - East Detroit - Highland Park Detroit - Northwest Detroit - Southwest Escanaba Farmington Flint - downtown Fort Gratiot Grand Rapids Grand River Holland Houghton Inkster Ironwood Jackson Kalamazoo Lansing Livonia Ludington Marquette Monroe Mount Pleasant Muskegon Flint - north Owosso Petoskey Pontiac Roseville Saginaw Sault Ste. Marie Sterling Heights Traverse City West Branch Wyandotte Jalen Williams is a trending reporter at the Detroit Free Press. Contact him at jawilliams1@ This article originally appeared on Detroit Free Press: Michigan AG's office offers place to report problems with Social Security
