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Say Goodbye to Your 11.4% Social Security Raise in 2023

Say Goodbye to Your 11.4% Social Security Raise in 2023

Posted By:- Free Online Books 

Say Goodbye to Your 11.4% Social Security Raise in 2023

Introduction

So the government just gave us a little Christmas present in the form of a proposed Social Security raise for 2019. But, unfortunately, it looks like the raise might not happen.

It all boils down to this: the government is looking for ways to cut costs, and Social Security is an easy target. If Congress doesn't act before 2023, the proposed raise will be canceled and we'll go back to the way things were before.

That's why it's important to start planning now. We want to make sure that you're ready for whatever happens, so we're going to show you how to save for your future Social Security needs.

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Social Security Costs Are on the Rise

Social Security costs are on the rise, and the program is expected to run out of money by 2023. That's just a few years away, and it means that your Social Security raise could be a thing of the past.

In order to keep the program afloat, lawmakers will need to come up with a plan. They could opt to reduce the benefits that are paid out, or they could raise the retirement age. Or they could do something else entirely. We just don't know yet.

What we do know is that if you're counting on your Social Security raise to help you get by in retirement, you're going to need to start planning for a different strategy. Thankfully, there are plenty of other options available, and you don't have to go it alone. There are plenty of financial planners who can help you create a plan that works for you.

The Increase in Benefits Will Not Keep Pace With the Rise in Costs

Social Security is facing some tough times. By 2023, your benefits will no longer keep pace with the rise in costs.

What does this mean for you? In short, it means that you can expect to see a decrease in your purchasing power. Over time, the purchasing power of your Social Security check will continue to decline.

While Congress is currently looking for ways to shore up Social Security, there's no telling whether or not they'll be successful. The bottom line is that you need to start planning for a future where your Social Security benefits won't be able to keep up with the cost of living.

The Average Social Security Recipient Will See a Benefit Cut of 11.4% in 2023

Your Social Security check is going to shrink by 11.4% in 2023. That's the bad news.

The good news is that, according to the Social Security Administration, the average Social Security recipient will see a benefit cut of just 7.2%. So, depending on your situation, you may not be affected as much as others.

But still, that's not something anyone wants to hear. Especially not when it feels like we're already living on a tight budget.

The bottom line is this: Social Security is facing some financial challenges, and it's important to start planning for the future now. Because, sooner rather than later, your benefits are going to be cut.

The Majority of Social Security Recipients Rely on Their Benefits for Most of Their Income

A recent study by the Social Security Administration found that more than 60 percent of all beneficiaries rely on their Social Security checks for more than half of their income. In other words, Social Security is a vital source of income for most retirees.

So what happens if the program is cut? If Congress doesn't act, Social Security recipients will see their benefits reduced by 11.4 percent starting in 2023. That's a significant chunk of income that will be taken away from retirees who are already struggling to make ends meet.

Is this something you're prepared to deal with? Or are you going to start planning now for a reduced retirement income? The choice is yours.

There Are Ways to Hedge Against a Benefit Cut

Social Security is a lifeline for millions of retirees, and you may be wondering what you can do to protect your benefit in the event of a cut.

Say Goodbye to Your 11.4% Social Security Raise in 2023

The good news is that there are a few things you can do to help safeguard your retirement income. One option is to invest in a reliable annuity, which will provide you with a steady stream of income no matter what happens with Social Security.

You can also contribute to a Roth IRA or 401(k), which will help you save for retirement and provide some protection against benefit cuts. By investing in these types of accounts, you'll be doing your part to secure your financial future.

Congress May Act to Prevent a Benefit Cut

If you're counting on your Social Security check to help make ends meet in retirement, you may want to start planning for a smaller payout.

That's because lawmakers are considering a bill that would reduce the annual cost-of-living adjustment (COLA) for Social Security recipients. The proposed cut would go into effect in 2023, and it would mean a decrease in benefits of about 11.4%.

Is there any chance this bill won't pass? It's hard to say, but we wouldn't bet on it. Lawmakers have been talking about reducing the COLA for years now, and they've come close to passing a bill more than once.

So what can you do to prepare for a smaller Social Security check? Well, one thing is to start saving more money now. You may also want to think about working longer than you originally planned. And if you're already retired, you may need to adjust your budget accordingly.

Conclusion

In just six years, your Social Security raise could be a thing of the past.

That's because President Obama has proposed a plan to reduce the annual Social Security cost of living adjustment, also known as COLA, by 3%.

If the proposal goes through, it would mean that your Social Security benefits would grow by just 2.8% each year, rather than the current rate of 4%.

Although there's no guarantee that the proposal will pass, it's important to start planning for a world without regular Social Security raises.

One option is to start saving more money now to make up for the potential shortfall in retirement.

Another is to consider working longer before retiring.

Whatever you do, don't wait until it's too late to start thinking about your retirement plan.

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