The Social Security Administration announced this week a 1.3% increase in cost-of-living benefits for 2021. The new COLA boost is the second-lowest in the program’s history. Recipients will only see an extra $20 a month on their benefit checks.
In the middle of a pandemic that has put the financial security of millions at risk, this low of an increase is an obvious source of concern for retirees. Continued rumblings from Washington D.C. about possible cuts to the program are an even bigger reason to worry.
Will Congress Respond?
There is one sign of potential relief, as two Democratic lawmakers will propose a bill that would raise the COLA increase to 3%. The Emergency Social Security COLA for 2021 Act could be introduced as early as this week. If it fails to pass, the estimated average monthly benefits for all retired workers will be $1,543.
Coming off last year’s 2.8% COLA increase, the largest in nearly a decade, the extra $20 a month will do little to help those whose benefits account for most, or all in some cases, of their retirement income. Even those with additional sources of income will need to do something to offset inflation and rising medical costs.
Social Security Marketing Opportunities
The SSA’s announcement should be taken as an opportunity for financial professionals to prioritize Social Security when connecting with clients and prospects. There are multiple variables involved with Social Security (when to claim, whether to keep working, etc.). Those without a solid grasp on the program could easily miss out on strategies that will help maximize their benefit amounts.
Do you want to help your clients get the most out of their Social Security benefits? IAMS offers regularly scheduled webinars designed to do just that. The Social Security Claiming Guide webinar covers:
- Three changes you need to know
- Making Social Security claiming easy and profitable
- Why Social Security expertise is your best prospecting machine
- The must-have process for an easy transition to big sales