HAMPTON ROADS, Va. – Social Security and SSI recipients can expect to see an increase in their benefits in the new year. Despite a lower cost-of-living adjustment than in previous years, economists believe that the current decrease in inflation will make the bump in benefits more noticeable. On average, those receiving these benefits will see an extra $50 per month in their checks.
However, the modest increase in benefits might not provide the relief that many seniors need, as other costs such as medication and housing continue to rise. According to ODU Economics Professor Bob McNab, it is crucial for individuals and their families to be aware of the available benefits, especially as they plan for retirement.
McNab emphasized that Social Security was never intended to be the primary retirement system for Americans, but it has become the main source of income for many retirees. With the benefits increasing by 3.2% this year, there are also changes to the earnings thresholds and the amount of earnings subject to Social Security tax.
Although the increase in benefits is a welcome change, the rise in Medicare premiums means that the net gain for recipients may not be the full 3.2%. McNab also pointed out that while $50 extra per month might help, other expenses for seniors, such as medical and housing costs, have not decreased.
The changes to the earnings thresholds indicate that individuals at full retirement age can now earn more than $50,000 annually before seeing their benefits reduced due to excess earnings. On the other hand, those who have retired early will have a reduced ability to earn money and retain their full Social Security benefits. It is clear that the changes in Social Security benefits and tax thresholds highlight the obstacles that lawmakers will need to address in the coming years.
McNab also stressed the importance of planning for retirement, regardless of one’s age. Having a solid plan can help individuals navigate any uncertainties and challenges that may arise along the way. The Social Security Administration should have already notified beneficiaries about their new benefit amounts, but if not, recipients can view their COLA notice online.