Social Security’s Small Increase Helps Disability, Retirement Benefits
Every dollar helps when it comes to Social Security Disability Insurance (SSDI) and retirement benefits, and it’ll be a little bit more next year.
The Social Security Administration announced last week that the cost-of-living adjustment (COLA) will increase by 2 percent—the biggest jump since 2011. COLA increases are partly based on the annual Consumer Price Index, which factors in the inflation rate for goods and services.
More than 2.5 million retired federal government and military retirees will also enjoy the same 2 percent increase in their monthly checks.
The pay bump will increase the average SSDI benefit by about $288 a year, from $1,173 to $1,197. You’re wrong if you think that a 2 percent increase won’t make a real difference.
Because of the magic of the compounding effect, even small increases can make a big difference over the years. For example, if you increase your checking account of $1,000 by 5 percent, you’ll have $1,050. Because the next 5-percent increase will be based on the new amount, you’ll then have $1,102.50. After 10 years of such “minor” differences, your original $1,000 is now magically $1,650.
The COLA is one of those important reasons to apply for disability benefits.
When a severe disability gets in the way of your ability to work for a year or longer—it’s a day by day, dollar by dollar dilemma.
Wondering if you, or someone you know, should apply for SSDI? Visit empower by Allsup®.