Will I get cost of living increases when I am on Social Security?
Cost of living refers to the ability to maintain a certain standard level of living that is, you have access to all the basic and secondary needs required to survive. This includes food, shelter, clothing and the most common need being transportation. Based on previous economical fluctuations it is safe to say that cost of living is not constant and can gradually change from time to time in respect t the economy status. For many people this constant shift in the cost of living causes an imbalance in financial planning but being on social security means that you can get cost of living increases/adjustments depending on various factors like consumer price index. Cost of living increases/adjustments leave room for cases of inflation.
How Cost Of Living Increases Your Financial Needs
Cost of living increases you financial needs such that you are required to spend more on a normal day. Your social security benefits would therefore run out faster than possible if the cost of living is almost double what it was during the time you were saving. If you get cost of living increases you can thus be protected from the harsh conditions associated with inflation.
How Is Cost Of Living Increases Calculated/ Determined?
The cost of living increases rate greatly depends on consumer price index and this can change depending on the economic standing of that particular year.
Benefits Of Cost Of Living Increases
Cost of living increases protect you from unforeseen changes in the economy. This feature ensures you are always prepared in case of inflation and that you can still survive under different financial conditions, which may occur during your retirement period.