Good News for Retirees: Social Security's Biggest Raise in 41 Years Comes With a Silver Lining
Inflation hit a four-decade high last year as prices soared across most spending categories, from food and fuel to housing and utilities. To make ends meet, many Americans were forced to withdraw money they had been saving for retirement, and retired workers on Social Security benefits were dealt an even more difficult hand.
Economic uncertainty caused a sweeping downturn in the stock market, erasing trillions of dollars from individual retirement accounts (IRAs) and 401Ks. To make matters worse, the 5.9% cost-of-living adjustment (COLA) applied to Social Security checks in 2022 failed to keep pace with inflation, meaning benefits lost buying power. In other words, retired workers effectively took a pay cut last year.
To rebalance the scales, Social Security benefits got an unusually large 8.7% COLA in 2023. Retired workers haven't seen a raise that big since 1982, and that raise comes with an important silver lining.
Source Fool.com
