Recent research shows that some older workers are considering returning to work to cope with rising costs. (iStock)
Seniors say this year's modest cost-of-living increases in Social Security benefits won't be enough to offset the lingering effects of high inflation on their household budgets, according to a recent survey.
According to Atticus, nearly 3 in 5 seniors receiving Social Security are financially disadvantaged, and 62% will not be able to cover their expenses with a 3.2% cost-of-living adjustment (COLA) in 2024. They answered that it was insufficient to support their style. investigation Said. Approximately 40% said they plan to find work due to the gradual increase in COLA, and nearly half (47%) of single seniors are considering employment to supplement their income.
In January, more than 71 million seniors receiving Social Security benefits will receive a 3.2% COLA, an average of about $59 more each month. Increased payments to approximately 7.5 million SSI recipients will begin on December 29, 2023. The adjustment amount is lower than in previous years due to moderate inflation. Recipients will receive an 8.7% increase in 2023 and 5.9% in 2022, the largest increase since the early 1980s due to record high inflation.
“The 2024 COLA hike highlights the serious financial stress of seniors collecting Social Security and highlights the widening gap between Social Security benefits and rising costs of living,” Atticus said. stated in the report. “These statistics and individual reports demonstrate the urgent need for stronger measures to support older people, especially those who are single or considering re-employment. Addressing their financial security as they navigate these challenges requires a comprehensive reassessment of how they are supported.''Our population is aging. ”
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Taxes and Medicare costs eat into your COLA
As many as 26% of survey participants who have received Social Security benefits for three or more years reported paying taxes on a portion of their benefits for the first time during the 2023 tax season, the Senior Citizens League (TSCL) announced. did. investigation. Because the COLA will increase significantly in 2023, an even larger percentage will likely pay taxes on their benefits in 2024.
“Up to 85% of your Social Security benefits may be taxed if your income exceeds a certain threshold,” TSCL said. “Unlike other parts of the federal income tax law, the income threshold by which Social Security benefits are taxed is not adjusted for inflation. A person may reach a taxable threshold for having their Social Security benefits taxed. ”
The standard monthly cost of Medicare Part B, which most seniors and people with disabilities need to cover certain physician services, outpatient care, medications, and preventive services, has also increased by $9.80, or 6%. That comes out to $174.70. Centers for Medicare and Medicaid Services (CMS). A Medicare Part B beneficiary's annual deductible is scheduled to increase by $14 to $240 in 2024. His Medicare Part A inpatient deductible will be $1,632 in 2024, an increase of $32 starting in 2023.
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Non-retirees are more optimistic about the future of Social Security
More working Americans now expect to receive Social Security benefits when they retire, according to a recent Gallup report. investigation.
The survey found that half of respondents expect to receive benefits from Social Security when they retire, but 47% do not. In the last three surveys, in 2005 and 2015, non-retirees were more likely to predict they would not receive Social Security retirement benefits. Additionally, 53% of current U.S. retirees believe they will continue to collect their full Social Security benefits, up from 37% in 2010 and 49% in 2015.
This improvement comes despite projections that Social Security benefits could be cut by 20% as early as 2034 if no changes are made to the system, according to the Trustees' recent annual report. It was done without fail. released by the Ministry of Finance. It is expected that by 2034, 80% of the benefits will be available to recipients.
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