Social Security benefits are getting the biggest bump in 4 decades, but it could cost today’s workers

Break out the boozy bingo… Retirees are getting the biggest boost to their Social Security benefits in over four decades. Starting in January, all Social Security recipients will get a record 8.7% bump, bringing the monthly payouts to just over $1.8K. Every year the US government adjusts Social Security benefits to keep up with the cost of living (see: COLA). Despite a nearly 6% increase in COLA benefits this year, the payout hasn't kept up with inflation.

• Nearly 70M Americans receive SS benefits, and nearly a quarter of recipients 65+ rely on those checks for most of their income.
• Since 1937 nearly every American worker (and their employer) has been required to pay Social Security taxes (taken from every paycheck).
• The current tax rate for people making under $147K is 6%. TBD if that’ll eventually rise because of the bump. Starting next year, the max amount of earnings subject to SS tax will increase to $160K from $147K.

Goodbye, Boca timeshare… The extra cash should be a welcome relief to inflation-strained retirees, since Americans are burning through their savings. Last year, the cost of one of Medicare's most popular coverage plans went up 14.5% to $170/month. Since most older adults opt to have those costs deducted from their SS checks, it leaves them with less $$. Meanwhile, nearly $3T has been wiped from Americans' retirement accounts (think: 401(k)s, Roth IRAs) as stocks have tumbled this year.