The budget that is being proposed by the executive branch for 2014 includes a shift toward calculating inflation via the use of a chained CPI or Consumer Price Index.
The government has been using the Consumer Price Index for Urban Wage Earners and Clerical Workers to determine the rate of inflation. This determination is utilized to provide cost-of-living adjustments for people who are receiving Social Security benefits.
Going to a chained CPI is going to save the program money, but that money is going to be coming out of the pockets of seniors. They will be receiving lower cost-of-living adjustments if the chained CPI is utilized.
When you are planning for retirement you should know all the facts about Social Security. Clearly, if this goes through the cost-of-living increases will be reduced, and they really aren’t much to speak of at the present time. The cost-of-living adjustment for 2013 was just 1.7%.
Clearly, most people are going to rely on Social Security to one extent or another during retirement. However, you should understand the fact that as of the end of last year the average Social Security benefit was just $1,262 per month.
To find out exactly how much you can expect to receive you can register your account on the Social Security Administration website. Your benefit amount is calculated based on the 35 years during which you earned the most amount of money.
Intelligent retirement planning is the key to a comfortable future. Social Security is a safety net, nothing more and nothing less. It is up to you to do what it takes to accumulate the resources that you need to enjoy a secure retirement.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.