EDITORIAL: Finally, some good financial news

Many of you reading this are going to receive an early Christmas present tomorrow, not to be opened until January, however.

And no, we don’t mean your Idaho tax check.

It’s the expected announcement of a whopping increase in Social Security’s Cost of Living Adjustment (COLA) for 2023. There’s also going to be a little something extra stuffed in your stocking by Uncle Sam.

Let’s look at this by the numbers:

• 8.7% — The approximate amount expected for the 2023 COLA for all Social Security recipients

• 5.9% — The 2022 COLA, which seemed massive at the time

• $1,658 — The average monthly Social Security payment for beneficiaries in 2021

• $1,909 — The average monthly Social Security payment next year based on the 5.9% increase for 2022 and an 8.7% COLA increase for 2023

That stocking stuffer? Experts say premiums for Medicare Part B (which are deducted from Social Security deposits) are actually going to decrease next year. Thus, retirees should see even bigger deposits with a little less taken out for Medicare Part B each month.

While this is great news for recipients, a broader view offers a more accurate overall picture.

True to COLA’s intent, it is a method to help keep up with inflation — not to get ahead. And for many in North Idaho, particularly retirees on fixed incomes who have seen their rent skyrocket, 8.7% will only lessen the gap, not eliminate it.

Also, the more your Social Security benefit goes up, the greater the possibility that your taxes on that income will, too. For some, 8.7% will be the gross but not the net.

Social Security is one of America’s most important programs, despite what Republican senators Ron Johnson of Wisconsin and Rick Scott of Florida are proposing. Scott and Johnson want to eliminate Social Security and Medicare, leaving it up to Congress every year to decide what to do.

Anyone else out there clamoring that socialism is intrinsically evil, we say, think hard before you paint with that broad brush. If you don’t want your Social Security and Medicare benefits, we can recommend some outstanding charities that would appreciate them.

For an in-depth look at Social Security and its COLA broken into bite-sized, understandable chunks, check out this excellent report from The New York Times: https://nyti.ms/3ytBKxw

And happy early Christmas!