I'm Not Counting on Social Security COLAs to Carry Me Through Retirement. Here's What I'm Doing Instead.

Social Security recipients and some pension recipients are eligible for one cost-of-living adjustment (COLA) annually. The Social Security Administration (SSA) turns to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine the amount of a COLA. Specifically, it looks to see how much the CPI-W increased between the third quarter of the prior year and the third quarter of the current year.COLA increases aren't typically large enough to blow your hair back, but they can be helpful. For example, this year, benefits were raised by 2.5%. Although COLAs are designed to help retirees keep pace with inflation, I've never factored a COLA into our expected income. The primary reason is that COLAs are not guaranteed. The idea of counting on non-guaranteed money gives me the willies, so I've devised another way to make the most of any increases that come our way. It's quite simple and will require very little time to implement.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool