Despite expectations, inflation has remained rampant in our economy. As a result, seniors on Social Security are likely to receive a healthy bump to their benefits. The amount the benefit will increase will ultimately depend on how inflation rises or falls, but early projections suggest a 10.5 percent increase to senior benefits. On average, that’s about an extra $175 a month, but as CNBC’s Annie Nova reports, is it enough?
Inflation vs. Extra Cash
Extra cash is always excellent, and seniors could use some financial relief. Medicare premiums and the general cost-of-living have increased exponentially, and those that use benefits primarily as income have had to make some stricter budgetary cutbacks. And now, as a potential recession looms, seniors need to be flexible with their funds.
There are literally hundreds of ways to spend extra cash, and the smarter you can be with your money, the more options you may have available to you. Obviously, paying for essentials takes precedence. Medicare premiums can eat at a benefit, so diverting that cost-of-living adjustment (COLA) increase can ease those costs.
Additionally, as crazy as it may sound when dealing with an inflated market, but investing is a real, viable option for seniors looking to make use of their extra $175 a month. Plus, never forget that a little fun is healthy, so spending your $175 on a treat once and awhile, like dinner and a movie, or some new clothes, can be good for your self-esteem.
The absolute best thing seniors with extra cash can do today is save. Most Americans in general would be hard pressed to cover an unexpected $1,000 expense. Creating an emergency fund in tough times is just another way of building a financial safety net for you and your loved ones.
For more retirement news and senior tips, stay up to date with the Council for Retirement Security.
