COLA Forecasts Always Disappoint. It’s Better to Bank on High-Yield ETFs Before Social Security Is Insolvent

Core Insights - Millions of retired Americans rely primarily on Social Security for their income, which is not a sustainable financial strategy [2][4] - The average monthly Social Security benefit is approximately $2,015, translating to just over $24,000 annually, which is insufficient for most retirees [4] - Social Security is projected to face significant financial challenges in the next decade, particularly as baby boomers retire, leading to potential benefit cuts unless legislative action is taken [5] Financial Implications - Social Security is expected to replace only about 40% of an average paycheck, which may not be adequate for retirees [4] - The program's trust funds are at risk of depletion, which could necessitate benefit reductions unless new funding sources are identified [5] - Annual cost-of-living adjustments (COLAs) often do not keep pace with inflation, particularly in healthcare costs, which disproportionately affect retirees [6][8] Recommendations for Financial Security - Relying solely on Social Security can lead to income shortfalls in retirement, making it essential to consider additional income sources [10] - Investing in ETFs that provide steady income is suggested as a viable strategy to supplement Social Security benefits [10] - Understanding the limitations of Social Security can help individuals plan for a more secure retirement [11]