This is what Social Security will not tell you...

Your cost-of-living adjustments come up short

Every year, Social Security recipients get a cost-of-living adjustment, a little bump based on the current rate of inflation and designed to cover the rising cost of everything from toothpaste to airline tickets. But some critics say the current measurement of inflation does not reflect the higher costs that seniors truly face. For example, many people in retirement may spend a large share of their budgets on health care, and the adjustments might not cover the steep rise in housing costs that can occur when seniors need to move into assisted housing. Plainly said in many parts of the country, a monthly Social Security benefit isn't enough to cover basic living expenses.

The pricing pressure means some retirees could find themselves struggling to cover essentials like gas, medicine and housing, meaning they will have to cut spending in other areas. For pre-retirees, it means ramping up your savings today so that you can struggle less in your golden years. The Social Security Administration says it has been using the Consumer Price Index to measure inflation for the cost-of-living adjustments since legislation instituting automatic cost-of-living increases was enacted in 1972, and changing the benchmark would take an act of Congress.

So, what can we do about it?

A simple understanding of how you can not depend on Social Security alone for your retirement is a start.

Call me for a FREE financial analysis of your financial situation,

Jesse Alvarado
(562)822-5565