Those receiving Social Security benefits experienced a bit of good news this past week, as the government announced a 2.8% bump in benefits for 2019. This 2.8% increase reflects a cost of living adjustment, as inflation in the U.S. has risen over the past year. The benefit bump is the largest since 2012 for retirees.
While Social Security typically comprises just a small portion of our clients’ overall financial plan, the inflation adjustment element to these payments is a welcome feature. When we plan for retirement, or simply a work-optional lifestyle, we want to ensure that we are planning in real dollars. In other words, it will cost more in the future to attain the same lifestyle that you enjoy today. And part of the solution here is to have an income stream that will rise with inflation, as Social Security does.
The issue of when to begin collecting Social Security benefits is an important one, even for high net worth families. And because of the nuance involved with each family’s financial situation, there is not one universally right answer. If you’re interested in discussing your Social Security benefits strategy, we welcome the conversation.