Wake up! Social Security’s Real Threat Isn’t Insolvency, It’s Inflation

Core Insights - Social Security's trust fund faces funding challenges, but inflation is a more pressing issue for retirees as it erodes purchasing power over time [2][5] - Cost-of-living adjustments (COLAs) lag behind actual price increases, particularly in healthcare and housing, leading to a growing gap between benefits and living standards [4][7] - Delaying Social Security claiming can provide a higher base benefit for future inflation adjustments, making it a valuable strategy for retirees [8][9] Inflation Impact - Inflation's impact accumulates slowly during retirement, with retirees experiencing a decline in purchasing power before COLAs catch up [4][5] - The mismatch between inflation rates and COLAs particularly affects healthcare and housing costs, which often rise faster than general inflation [7] - Many retirees feel financially squeezed despite receiving annual adjustments due to the lag in COLAs compared to real costs [7] Claiming Strategy - Delaying Social Security claiming increases the benefit amount, which compounds with future COLA increases [8][9] - Early claimants receive a lower starting amount that adjusts for inflation, while waiting longer results in larger percentage increases applied to a higher base [9] - Building inflation resistance into retirement plans is crucial, with suggestions to draw down other retirement accounts first if possible [11]