Welcome to the ‘New Retirement’ and What That Means
Retirement is no longer defined as when you are done working. An article by MoneyWise says in the “New Retirement,” 57 percent of people say they plan to continue to work. “Phased retirement” or “intermittent working” are becoming more common, with people choosing to work part-time or seasonally.
The article found that while many seniors say they want to maintain that sense of purpose and fulfillment found in work, two-thirds of respondents to a survey on retirement planning say they need the paycheck.
Higher Cost of Living
Everyday expenses are going up because of inflation. For retirees relying on Social Security benefits, the annual cost-of-living adjustment (COLA) falls short.
The article states that this year’s 3.2 percent COLA is not enough for many older adults to keep up with the current cost of living. Inflation is one of the top concerns among retirees and those planning for retirement, along with high healthcare costs.
New COLA Calculator
There’s a fatal flaw with the way the Social Security COLA is calculated. Currently, the formula is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or the CPI-W. The Seniors Trust believes the better option is to use the Consumer Price Index for the Elderly, or the CPI-E, instead. that index specifically tracks the spending of households with people aged 62 and older. It places greater value on rising costs of expenses unique to seniors such as housing, healthcare, and medicine. This would provide a much fairer cost-of-living adjustment for retirees because it would adjust based on the actual prices seniors are paying.
Securing Social Security
Changing the COLA calculator is just one of the main tenets of the Social Security Expansion Act. This landmark piece of legislation would also benefit retirees by providing an immediate Social Security benefits boost. It calls for increasing monthly benefits by about $200 on average, which would help put more money in the pockets of deserving retirees.
