Does Social Security Have An Inflation Donut Hole?
Big Picture Retirement®
Devin Carroll
4.7 • 546 Ratings
🗓️ 28 November 2022
⏱️ 9 minutes
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Summary
With all the attention given to the latest Social Security COLA, we've been getting lots of questions. Among the questions is about the alleged "donut hole" for Social Security inflation adjustments for individuals 60 and 61 years of age.
Some in this cohort are upset that they may be missing out on significant benefits increases during this high inflation period. This is based on the observation that if all wages are indexed through age 59, and the COLAs don't start until 62, there are two years of no inflation. Is this really how it works?
Transcript
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| 0:00.0 | The Big Picture Retirement Show does not provide tax, legal, or financial advice. |
| 0:04.3 | Listeners are encouraged to seek out their own advisors in these areas. |
| 0:10.6 | Hey, everyone, welcome to the Big Picture Retirement Show. |
| 0:13.4 | I'm your host, Devin, joined by my co-host, John Ross. |
| 0:17.0 | Howdy. |
| 0:20.5 | All right, John, inflation's been the hot topic lately. |
| 0:23.0 | No question about it. |
| 0:23.8 | We are in an inflationary environment. |
| 0:25.5 | The Social Security Cost of Living Adjustment that was just released is 8.7%. |
| 0:29.9 | That'll go into effect in 2023. |
| 0:32.8 | It's the largest increase we've had in 40-something years. |
| 0:35.6 | And I think in the history of the automatic benefit |
| 0:39.1 | adjustments, it's the fourth largest increase ever. Then you go to the grocery store. You can |
| 0:44.6 | feel how much inflation is going to cost you there, not how much it's going to get you extra in your |
| 0:49.4 | check. Price of beef. You've done much grocery shopping lately? Yes. In fact, I wanted steaks on Sunday. |
| 0:56.7 | And you ended up with chicken breast, I bet. Well, no, I bought the bullet because I really wanted |
| 1:01.1 | steaks. But man, they were pricey. It's ridiculous. Very pricey. If you have the taste of a filet |
| 1:07.9 | or a rabbi, you know, I went in to get filets because they're so easy to cook. |
| 1:12.5 | They make you look like a genius. |
| 1:13.9 | A little bit of seasoning. |
| 1:27.3 | Yeah, salt and pepper. And they're like, oh, you're such a good cook. I'm like, well, it's the meat, you know, because it's prime tend to. Yeah, no, it's good stuff. That's what I wanted. And I think I paid, I don't know, 50 bucks for four of them. |
| 1:28.4 | Yeah, no question. |
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