Amid the federal government initiating the largest boost to Social Security benefits since 1982, the Insured Retirement Institute (IRI) is encouraging additional sources of protected lifetime income into retirement plans.
The Social Security Administration (SSA) recently announced a 5.9 percent cost-of-living benefit increase for 2022 concerning inflation. The SSA issues a cost-of-living benefit adjustment annually.
“A cost-of-living increase for Social Security benefits is always helpful but only keeps the value of those benefits steady over time,” Frank O’Connor, IRI vice president, Research and Outreach, said. “While COLAs can help retirees keep up with basic expenses, the faster rate of health care cost inflation will continue to eat into retirees’ financial resources. Careful retirement planning that includes additional protected lifetime income is vital to ensure retirees can manage these costs.”
The IRI maintains annuities could aid in bridging potential retirement income gaps by providing more income per dollar invested than alternatives and guaranteeing income for life.
Additionally, the organization’s 2019 Boomer Expectations for Retirement report determined the average spent by retirees aged 65-74 is $55,000 – while 30 percent of baby boomers believed they will need $55,000 or more yearly in retirement.
“The bottom line is that workers and retirees should go beyond today’s Social Security benefit hike headline and talk to a financial adviser about savings and income strategies that will ensure a financially secure retirement,” O’Connor said.