Retirement planning involves having an understanding of the Social Security program. When you do examine the details you find that your benefit alone is probably not going to provide you with the income that you need to truly enjoy your retirement. In fact, you may not be able to retire at all if Social Security is your only source of income.
If you are in fact living on a fixed income you are faced with challenges because the prices of things steadily rise while your income remains the same. There are periodic cost of living adjustments that raise Social Security payouts, but they may not actually offset the rising costs that seniors face.
As a case in point a cost-of-living adjustment has been announced for 2013. Individuals who are receiving Social Security will be getting a 1.7% increase in their monthly benefits.
The average Social Security benefit amount will fluctuate constantly as people pass away and new people become eligible for the program. Presently the average monthly payout is $1,237. If you add 1.7% to this you are looking at approximately $21 added onto the monthly benefit of the average Social Security recipient.
Though this is certainly not a life-changing amount of money, the adjusted increase will actually be a bit less than this when you factor in the Medicare Part B premium increase that is scheduled for 2013.
The exact amount of this increase has not yet been made public, but it is reportedly going to be somewhere in the neighborhood of seven dollars per month, and this will erode that 1.7% COLA significantly.
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.