Inflated COLA

October 21, 2021

 

Reports from the Federal Reserve, which sets interest rate policy in the U.S., have famously told us that the current inflation that we’re experiencing is “transitory” despite a lot of data that might seem contradictory.  (Has anybody seen gas prices lately?  Has anybody tried to buy a house in this market?)  The current labor shortage is leading to higher wages, which usually find their way into the prices of goods and services, and the government has been printing money (mainly by issuing bonds and extending credit) at rates never seen before.

 

Add to this a new data point, one that will be welcome to many retirees.  The Social Security Administration, which relies on annual inflation data to set its cost of living increases, has just announced that Social Security benefit checks will be 5.9% higher in 2022 than they were this year.  This is the largest increase since 1982, when inflation was still rampant from the “stagflation” economic era.  To put that into perspective, Social Security’s cost of living (COLA) increase has averaged 1.65% over the past decade.

 

The average retiree received $1,565 in monthly Social Security benefits this year, and that will go up $92 a month, to $1,657.  The AARP tells us that this will be nearly all the income received by 25% of seniors in America, and many more rely on these checks to pay for a large part of their retirement expenses.

 

We hope that you and your family are safe and well. 

 

Sincerely,

Edward J. Kohlhepp, Jr., CFP®, MBA
President 

 

Edward J. Kohlhepp, CFP®, ChFC, CLU, CPC, MSPA

Founder & CEO

 

 

Source:

 

https://www.usatoday.com/story/money/2021/10/13/2022-social-security-cola-benefits-rise-5-9-amid-inflation-surge/8424187002/

This material was prepared by BobVeres.com., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

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Kohlhepp Investment Advisors, Ltd.
3655 Route 202, Suite 100
Doylestown, PA 18902
Phone: 215-340-5777
Fax: 215-340-5788
Email: Info@KohlheppAdvisors.com

Securities offered through Cambridge Investment Research, Inc. a Registered Broker/Dealer, Member FINRA/SIPC. Investment Advisory Services offered through Kohlhepp Investment Advisors, Ltd., a Registered Investment Advisor. Kohlhepp Investment Advisors, Ltd. and Cambridge Investment Research Advisors, Inc. are not affiliated.

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