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Slices of the Future: Current Trends in Social Security

March 19, 2024

Social Security, a cornerstone of American retirement security, is constantly evolving. Here's a look at some key trends shaping its future:

The Rising Tide of Retirees: Baby boomers are now reaching retirement age in droves. This demographic shift puts pressure on the Social Security trust fund, as the ratio of workers paying in shrinks compared to beneficiaries receiving benefits. It highlights the need for potential adjustments to ensure program sustainability in the long run.

Cost-of-Living Adjustments (COLAs): Social Security benefits are adjusted annually for inflation. The recent spike in inflation resulted in a significant COLA increase for 2024, offering some relief to beneficiaries. However, long-term inflation trends require monitoring to ensure benefits maintain their purchasing power.

The Future of Social Security: Discussions about Social Security's long-term solvency are ongoing. Potential solutions include raising the payroll tax, increasing the full retirement age, or a combination of both. It's important to stay informed about these discussions and potential changes that could impact your future Social Security benefits.

Delayed Claiming: There's a shift towards delaying claiming benefits. While the earliest eligible age for retirement benefits is 62, many people are opting to wait until full retirement age (currently 67) or even later. This trend helps maximize benefit payouts, as benefits increase slightly for each month you delay claiming past your full retirement age.

Speaking of "Delayed Claiming," here is a little story...

Amelia, a sprightly 65-year-old with a passion for graphic design, wasn't ready to retire when she hit the official eligibility age for Social Security. Though her friends were tempted by the early benefit option, Amelia had a different plan.

For decades, Amelia had freelanced for various design firms, building a strong reputation. She loved the creative freedom and intellectual challenge of her work. While her income fluctuated, Amelia had diligently saved for retirement. She knew that claiming Social Security early would lock her into a lower monthly benefit for life.

Instead, Amelia decided to delay claiming. This strategy allowed her to continue working and contribute to her Social Security for a few more years. Additionally, by delaying, Amelia's monthly benefit grew slightly each month. This "delayed retirement credit" can significantly boost your overall retirement income.

After two more years, Amelia felt a shift. She landed a lucrative contract with a growing tech startup, allowing her to finally take a step back. Confident in her financial security, Amelia claimed Social Security at 67, the full retirement age. Because of her delayed claim, she received a higher monthly benefit than if she had claimed earlier.

Amelia's story highlights the potential benefits of delaying Social Security. With careful planning and financial resources, delaying can significantly increase your retirement income. This allowed Amelia to maintain her desired lifestyle without relying solely on Social Security. Today, she enjoys a comfortable retirement, dabbles in freelance design projects, and even travels the world – all while enjoying a healthy Social Security benefit. Her story serves as an inspiration for those who want to maximize their Social Security and continue working into their later years.

If you are not sure how you should claim your Social Security benefit, give us a call at 704.708.5001 and let us help.  Don't pull your benefit, until you PLAN for your benefit.