Medical Costs Could Outpace Social Security's COLA in 2024. Here's How Retirees Can Cope.

Retirement is a time for relaxation and pursuing personal interests, but financial concerns often overshadow these plans. A study by Motley Fool reveals that 62% of retirees heavily or exclusively rely on Social Security for income. However, the annual cost-of-living adjustment (COLA) may not be sufficient to cover rising expenses, particularly medical costs, which have increased by 120% since 2000 compared to 85% for other goods and services.

To manage retirement expenses, it’s advisable to invest idle cash in low-risk investments such as bonds, CDs, U.S. Treasuries, or high-interest savings accounts. With the Federal Reserve maintaining higher rates to curb inflation, these investments are currently yielding over 5%. Additionally, retirees can trim their budgets by eliminating unnecessary expenses, such as unused subscriptions or daily coffee shop visits. Part-time work is also an option for generating additional income.

Medical costs are expected to continue rising faster than Social Security COLAs, putting a strain on retirees’ budgets. To alleviate some of this burden, retirees can consider the strategies mentioned above, such as investing in low-risk investments, cutting non-essential expenses, and taking on part-time work.

Lastly, it’s worth noting that there are strategies to maximize Social Security benefits, which could potentially provide an additional income boost. For more information on these strategies, interested individuals can visit the provided link.

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