Atlanta Financial Newsroom

How Much Will Your Social Security Increase in 2020?

How Much Will Your Social Security Increase in 2020?
AFA
October 14, 2019
You may have heard that the Social Security Administration officially announced that Social Security recipients will receive a 1.6% cost-of-living (COLA) adjustment for 2020. Those increased payments will start in January 2020.  The purpose of the COLA is to help the purchasing power of Social Security benefits keep pace with inflation.  Congress first enacted the COLA provision as part of the 1972 Social Security Amendments, with automatic annual COLAs began in 1975.  Before that, benefits were increased only when Congress enacted special legislation.

 

The actual amount of the increase is based on a formula using increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).  This is different than the two more widely-followed official measures of inflation used by the government – the Consumer Price Index (CPI) and Producer Price Index (PPI).  And to make matters even more confusing, there are many other inflation indices followed by economists to measure different aspects of inflation and how they impact different consumers and sectors of the economy.  Many of these measures of inflation yielded higher rates of increase, which has led educated observers to believe that Social Security will not likely keep pace with the “real” increases in retirees’ costs. Having inflation hedges built into your portfolio can be a critical way to protect your ability to keep pace with inflation throughout retirement.

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What is the SECURE Act and does it matter to me?

The Setting Every Community Up for Retirement Enhancement (“SECURE”) Act was signed into law on December 20, 2019.  With all of the discussion in the news around the political uncertainty, impeachment, and the looming trade war, one of the largest changes to retirement savings laws in recent years was passed with very little fanfare.  However, some of the changes will be significant.  I have tried to highlight what may impact the majority of our clients and readers.

The Act has a lot of positives such as simplifying rules and making 401k plans potentially available to more workers, pushing back the RMD age, and allowing contributions to IRAs past age 70.  The negative impact I see is the elimination of the stretch IRA which is a clear move by the government to raise tax revenues by forcing money out of inherited IRAs sooner.  I will discuss in more detail below, but this should be a time to review beneficiaries and discuss whether any change in your legacy planning should be made in response to the new laws. What do you need to pay attention to?

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Baby Steps: Financial Moves for Every Decade of Life

Recently, my husband and I took care of our 12-month old granddaughter while our daughter and son-in-law took a much-needed vacation together.  When they dropped her off, their parting words were, “She is almost ready to walk, but make sure she waits until we get home!”

Famous last words…  Of course, as soon as they left the house, she was trying to walk – literally everywhere.  And after about 24 hours she was taking her first baby steps.  By the time they arrived back three days later, she was walking (a little unsteadily but walking none-the-less) and was very proud of herself.  Great strides in just a few days but predicated on all of the trial and error and lessons learned in the months before.

Financial planning is a little like this.  You’ll make mistakes along the way – everyone does.  But you will do a lot of things right as well and the important thing to remember is that your financial health is based on doing the little things right, all along the way.

So, what should you be doing when you are 22, 52 or 72?  Here are three important tips for each decade.

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Cathy Miller Receives the Women’s Choice Award® as Highly Recommended Financial Advisor by Women for Women for Seventh Consecutive Year

Atlanta – November 19, 2019 – Atlanta Financial Associates, an independent financial advisory firm, recently announced that Cathy Miller, MBA, CFP® , CRPS®, CDFA™, has received the Women’s Choice Award® for Financial Advisors and Firms.

As the leading advocate for female consumers, WomenCertified Inc. selected Miller based on rigorous research and specific objective criteria; she has received this recognition every year since 2013. 

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