Look at big picture when factoring in Social Security increase
I was at the store the other day waiting in the checkout line and I couldn’t believe my eyes. I turned to the lady standing behind me while pointing at the price tag for a two-pack of Reese’s cups and said, “Can you believe that”? The price was $3.29! We discussed how we remember them costing 50 cents.
Unless you’ve been hiding in a bunker somewhere living off of MREs and canned goods, you’ve certainly seen prices increase across the board. I’ll spare you reading another article about inflation because I think we can all agree by now inflation is as “transitory” as the world is flat. I share the Reese’s story to set up how it’s important to keep perspective on your income in retirement.
Social Security in 2022 received an increase of 5.9% (average $92 per month); Medicare Part B is up 14.5% from $148.50 to $170.10 in addition to increased deductibles, according to AARP. Centers for Medicare & Medicaid Services (CMS) claims even after paying the increases to Medicare, because of the Social Security increase, beneficiaries will see a net increase in their monthly check. So, is that the reality?
I disagree with the CMS assessment because you still need to eat and heat your house. I guess if you are planning to skip the grocery lines and grab another blanket instead of turning on your heat for the winter, this might be true. If, however, you prefer to eat three square meals instead of Ritz crackers and to stay warm instead of using every blanket you own, your pocketbook will be a little lighter this year.
It’s very easy for people, companies and government agencies to look through a narrow lens and paint a rainbow and sunshine picture for their audience. It’s important we pull a Wizard of Oz from time to time and look behind the curtain. Behind the marketing and political agendas is often a completely different reality.
You’ve heard it said you can’t put lipstick on a pig. If the cost of things increases more than your Social Security check, then you have less money. There is no talking head that can spin the fact your shopping cart isn’t as full as last year. I’m not saying to think doom and gloom; I’m suggesting looking at the big picture.
I heard a farmer from Virginia once say, “Things aren’t always as bad as they seem or as good as they seem, they just seem that way.” Let that one sink in a minute and I think it will make complete sense to you. Perspective is everything. Of course things could always be better, but they could be a lot worse. All you can do is play the cards you are dealt in the moment and make a plan moving forward. It’s good advice to always plan for the worst but expect the best.
As the new year unfolds, remember not to just focus on the bigger Social Security check because right behind the curtain you’ll find a grocery bill, thermostat and gas pump that are hungry for your check. Everything in moderation doesn’t just apply to dessert; it’s a great principle for budgeting in your 20s or 80s. We might not have 50 cent Reese’s cups anymore, but there is a lot to be thankful for in the new year.