"Social Security benefits increase over time due to inflation and rising wages. During most years, current retirees are given a Cost of Living Adjustment (COLA) based on the rate of inflation. The COLA is calculated based on year-over-year changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers. Future retirees also typically leave work with higher average wages than those in the past due to natural wage growth over time, so they're likely to receive a higher initial benefit as well."
"The Federal Reserve's target inflation rate is 2%. If we see that 2% annual inflation rate over the coming decade, then the maximum benefit would equal around $6,227 in 2035. The average Social Security Cost of Living Adjustment over the last decade was 2.83%. If retirees received a 2.83% raise each year for the coming decade, they'd be looking at around $6275 as a max benefit in a decade."
In 2026 the maximum Social Security monthly benefit is $5,181. Those who maxed out average wages and claimed benefits at age 70 can receive upwards of $63,000 yearly. Maximum benefits typically increase over time because of inflation and rising wages. Annual Cost of Living Adjustments (COLAs) are based on year-over-year changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers. Future retirees often leave work with higher average wages, raising initial benefits. Scenario estimates for 2035 include roughly $6,227 with 2% annual inflation, about $6,275 using a 2.83% annual COLA, and around $6,349 with 4% annual inflation. Higher inflation raises benefits but can harm seniors.
Read at 24/7 Wall St.
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