"Today, millions of older Americans rely on Social Security for monthly income, and for many retirees, it's their only source of financial support. However, Social Security was never designed to replace a full paycheck. Without personal savings or additional retirement income, living on Social Security alone often means making tough financial sacrifices. That's why improving financial education - especially around retirement planning - is more important than ever."
"Social Security includes an automatic cost-of-living adjustment, or COLA, designed to help benefits keep pace with inflation. That doesn't mean payments rise every year. If prices increase, benefits usually get a boost. But if inflation stays flat or drops, retirees receive no adjustment at all. The bigger issue is that COLAs haven't kept up with the real expenses seniors face. Because of the way they're calculated, retirees have been losing buying power for years - a problem that will only continue without reform."
Millions of older Americans rely on Social Security for monthly income, and for many retirees it's their only financial support. Social Security was never designed to replace a full paycheck, so living on benefits alone often forces retirees into difficult financial trade-offs without personal savings or other income. Improving financial education about retirement planning can help individuals better prepare, while targeted policy changes could make Social Security more effective at meeting seniors' needs. One key reform would calculate COLAs using a senior-specific price index that weights healthcare and other retirement-relevant costs instead of relying on the worker-focused CPI-W. Another key reform would update the formula for determining benefits to better protect buying power and improve retirement income adequacy.
Read at 24/7 Wall St.
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