COLA is sweet for Social Security recipients

Published 12:00 am Wednesday, November 30, 2022

If you receive Social Security, you’ve probably already heard that your checks in 2023 will be considerably bigger. In fact, there’s an 8.7% cost of living increase, known as COLA. How should you use this extra money?

Of course, the sizable COLA is due to the high inflation of 2022, so you might need the larger checks to help pay for the increased cost of goods and services. But if your cash flow is already relatively strong, you may want to consider a few different moves.

First, the extra money may enable you to withdraw less from your investment portfolio, possibly helping it to last longer throughout your retirement.

Also, you could use some of the bigger checks to build your cash reserves, both in your portfolio and as part of an emergency fund.

You might also want to put some of the extra money into a tax-advantaged 529 education savings plan for a grandchild or another family member. Or, you could boost your contributions to charitable groups.

Future COLA increases likely won’t be as large as the one for 2023 – so try to take full advantage of it while it’s here.

 

This content was provided by Edward Jones for use by Robert Hymel, your Edward Jones financial advisor at 985-652-5054.