“It’s the backbone of our retirement system,” said Alicia Mannell, director of the Center for Retirement Studies. “It’s the foundation that everyone depends on or builds on. There’s no question about that.”
A big Social Security check will help Tish Leon, 71, keep his rent up 5% last year. (Leon owns his trailer, but not the land.) This will eventually save enough money to upgrade the house. Her current checks of about $2,100 make up about 80% of her income. Every month she withdraws an additional $500 from her retirement savings, which she saved while working as her office manager at a nonprofit.
“The cost of living is really high,” says Leon, who lives in Lakeside, California. Some changes have been made, such as restricting driving to keep gas costs down. “When I drive, I try to do as much as possible while I’m out.”
This year, retirees can also keep more of their annual Social Security check increments. Last year, Medicare beneficiaries had to absorb a huge increase in premiums deducted from their checks. But this year he will see his premiums drop for the first time in over a decade. Medicare Part B’s standard monthly premium, which covers doctor’s visits and outpatient hospital services, will be $164.90 in 2023, $5.20 less than he did this year. Medicare and Medicaid Service Center.
A California retiree, Hinojos has been working since he was 15. She continued her nearly 40-year career in accounting with her last employer, mostly at a private university.
However, as a single mother, it was difficult to secure enough money for her old age while raising her son. She had some money saved on her 401(k), but two market crashes slashed her savings, she said. She also withdrew money at another point to try and save her house, which was in foreclosure, but she lost it anyway.
“It turned out badly,” said Hinojos, who tries to keep her grocery bill under $200 a month and receives some savings from relatives. “As a result, a lot of my his 401(k) money was wasted.”
Social security has been the engine of stability. “With all the ups and downs,” Mr. Hinohos said.