August 23rd, 2023 6:45 PM by Juan Luis Rodriguez-Kohly
Recently I posted an article on the effects of the high inflation rates that we are all suffering on the Reverse Mortgage Rates and how it would lower the Funds that You Would Receive!!! (see article below this one)
This new article describes how inflation WILL lower the effect of the funds you receive from Social Security regardless of the COLA increase.
The Center for Retirement Research at Boston College
THE IMPACT OF INFLATION ON SOCIAL SECURITY BENEFITS By Alicia H. Munnell and Patrick Hubbard*
This fall, the U.S. Social Security Administration is likely to announce that benefits will be increased by around 6 percent beginning January 1, 2022. This cost-of-living-adjustment (COLA), which would be the largest in 40 years, is an important reminder that keeping pace with inflation is one of the attributes that makes Social Security benefits such a unique source of retirement income. A spurt in inflation, however, affects two other factors that determine the net amount that retirees receive from Social Security. The first is the Medicare premiums for Part B, which are deducted automatically from Social Security benefits. To the extent that premiums rise faster than the COLA, the net benefit will not keep pace with inflation. The second issue pertains to taxation under the personal income tax. Because taxes are levied on Social Security benefits only for households with income above certain thresholds ($25,000 for single taxpayers and $32,000 for joint returns) and the thresholds are not adjusted for wage growth or inflation, rising benefit levels subject more benefits to taxation – again reducing the net benefit… Continued: Download the entire Brief at:
https://crr.bc.edu/wp-content/uploads/2021/08/IB_21-14.pdf
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