Jaspreet Singh: Why the Retirement Crisis Has Gotten Worse

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Many Americans struggle to save and grow their retirement savings enough to retire comfortably. And inflation is making the retirement crisis even worse, as attorney and financial influencer Jaspreet Singh explains in a recent YouTube video.
Social Security beneficiaries will soon receive a 3.2% increase to their benefits, due to the annual cost of living adjustment (COLA). The COLA will kick in on December 29, 2023, for Supplemental Security Income (SSI) beneficiaries, and those who receive Social Security benefits will see the increase starting in January 2024.This cost of living increase is calculated “based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year,” explains the Social Security Administration.
Yet the problem, notes Singh, is that this COLA isn’t necessarily enough to keep up with rising costs, because COLA is a lagging indicator. If inflation keeps rising, Social Security beneficiaries could fall further behind. He points out that the September 2023 Consumer Price Index report showed a 3.7% annual increase, which outpaces the COLA increase.“In plain English, what that means is that next year, Social Security beneficiaries will be getting more dollars, but those more dollars will be able to buy less stuff than what they could buy this year and the year before,” says Singh.
Plus, within those inflation numbers, some categories rose significantly faster. For example, motor vehicle repair rose by 14.9% and nonprescription drugs rose by 8.4%, as Singh highlights.This issue should be a wake-up call to future Social Security recipients that you can’t rely solely on Social Security to fund your retirement, says Singh. And current Social Security recipients may need another source of income if they want to be able to afford as much as they could in the past, he adds.Working in retirement might seem counterintuitive, but many people find that they’re able to find enjoyable part-time work or side hustles in their golden years. Doing so can be a good way to stay active, mentally engaged and social.A recent GOBankingRates survey found that 21% of Americans 65+ took on a side gig over the past year, with about half doing so for extra spending money and half to spend on bills. Among those 65+ with side gigs, 9% made over $1,000 per month, which was a higher percentage than any other age group.
So, this could indicate that seniors can leverage their work experience to bring in more side income. Whether that’s consulting work, monetizing your hobbies such as by selling crafts, pet sitting, etc., you may find that you have more opportunities than you assumed to bring in more income, even if the cost of living keeps rising.