The media asked me about the new 2013 adjustment to Americans’ Social Security.  Today the announcement came in, as expected, at 1.7%.

As most people know, last year the adjustment was 3.6% and the previous two years were 0%.

I have 3 comments on this cost of living adjustment:

  1. Most people will see an increase of about $12 a year ($25 at the high end).  Yes, this is it.  The joke is that Medicare Part B, which is taken out of most peoples’ Social Security monthly payment is going up $7 a month.  So, did the cost of living adjustment really work! NOT.
  2. The cost of living adjustment calculation needs to change.  Without going into details the adjustment is based on CPI-W, which does not accurately assess inflation for health care cost for a senior.  Unfortunately, this is an area that is not well understood, but I think more Americans are feeling it since the adjustment is not keeping up with inflation.
  3. Don’t count on the adjustment making up for claiming sub-optimally.  You need to make sure you get all the money you are entitled too.  Create smart strategy which may find thousands more.


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