How does inflation impact Social Security?

Eagle Wealth Management |


Hello Eagle Wealth Community,

Retirement may hold many surprises (like mastering tai chi, a safari adventure, or even bungee jumping).  But your sources of retirement income shouldn't be one of them.  It's crucial to have a strategy that keeps your expectations in line with reality. 

When it comes to Social Security, there’s a wealth of information out there.  There’s no shortage of scare tactic headlines, right?  The problem is that it’s often misleading or incorrect, so it’s easy to make missteps that impact your government-guaranteed income.   Social Security is already complicated and confusing enough as it is.  That’s why it’s so important to get the most accurate and up-to-date information.

In our experience, Social Security is one of the most misunderstood sources of retirement income.  For instance, only 33% of people in 2021 expected Social Security to be a major income source during retirement.  In reality, it was a major source for 62% of retirees.3 After years of working, most of us are accustomed to receiving a regular paycheck on a steady basis.  Your retirement strategy should be just as reliable.  

If there is a "silver lining" to all the inflation talk, it may be that Social Security benefits are expected to see a larger-than-normal increase in 2022.  
More than 65 million Americans receive Social Security, and the annual cost of living adjustments are meant to help recipients manage higher costs.  Whether you’re receiving Social Security, helping a loved one manage their budget or planning, it’s good to know when changes happen.  

So, what does this mean to you?  Here are the facts. 

  • At the start of 2021, recipients saw a 1.3% increase.4
  • The average monthly benefit is $1,544 for retired workers.  So, a 6.1% increase amounts to $94 more a month.  That might not be quite enough for a car payment, but it’s double the 3% raise being given to U.S. workers in 2021.4,5
  • It's now projected that benefits will increase 6.1% in 2022, up from the 4.7% forecast just a few months ago.  That would be the most significant increase since 1983.1,2
  • Social Security cost of living adjustments (COLA) is based on the consumer price index, which rose 5.4% in June — its largest 12-month increase since 2008.  The official announcement is expected in October and, once it’s confirmed, the revised payment will go into effect in January 2022.3

What should you do now?  Have trust in your financial plan.  

Cash flow is a significant part of your plan and that’s why we update it at your review meetings.  More than anything, we want you to feel confident in your plan and know you have a support team behind you. 

Please reach out if you still have questions.  We’re always happy to talk with you. 




Your Eagle Wealth Team


Have you ever become a regular at a restaurant?  The kind of regular where they know your drink order before you even reach the table.  

The pandemic sure took its toll on the industry and one of our clients wanted to treat their favorite server to a special surprise.  They nominated her for our Invested in Community program.  The server received a handcrafted gift box filled with products made by Oregon business owners.  We’re delighted to help recognize such a hardworking community member.  

We have one more box to give away for this series of our Invested in Community program.  Do you know someone who deserves a surprise?  Sign up here.   

P.S. Keep an eye out for our fall series of Invested in Community.


The Week on Wall Street

The stock market powered to record levels last week amid talk of Fed tapering and a deceleration in new Delta variant cases.

The Dow Jones Industrial Average gained 0.96%, while the Standard & Poor’s 500 increased 1.52%. The Nasdaq Composite index led, picking up 2.82%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.39%.1,2,3

Pushing Higher

Stocks surged to begin the week as investor sentiment improved on news of the FDA’s approval of its first COVID-19 vaccine, a strong housing number and comments by the Federal Reserve Bank-Dallas president that he would support delaying tapering if the Delta variant spread worsened.

Stocks continued their climb through midweek, pushing the S&P 500 to another record high and the NASDAQ Composite above 15,000 for the first time. The S&P 500 and NASDAQ Composite closed the week at record highs following Fed Chair Powell’s comments that Fed is likely to begin winding down its monthly bond purchases (aka tapering) by year-end, though no interest rate hikes were imminent.4

Powell Speaks

At last week’s Jackson Hole Economic Policy Symposium, Fed Chair Jerome Powell’s speech on Friday provided further insights into Fed plans to begin tapering. Powell said that the Fed may likely commence tapering prior to year-end, adding that the wind down of bond purchases should not be seen as a signal for future rate hikes. Powell emphasized that labor market conditions remain short of the Fed’s target for maximizing employment. He also reiterated his case for why inflation remains a transitory phenomenon.4

With a number of Regional Federal Reserve Bank presidents already supportive of tapering, investors may see more definitive steps coming out of next month’s FOMC (Federal Open Market Committee) meeting.



Tuesday:  Consumer Confidence.
Wednesday: ISM (Institute for Supply Management) Manufacturing Index. ADP (Automated Data Processing) Employment Report.
Thursday: Jobless Claims. Factory Orders.
Thursday: Employment Situation Report. ISM (Institute for Supply Management) Services Index.
Source: Econoday, August 27, 2021
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.


Monday:  Zoom Video Communications, Inc. (ZM).
Tuesday: Netease, Inc. (NTES), Crowdstrike Holdings (CRWD).
Wednesday: Okta, Inc. (OKTA).
Thursday:  Broadcom, Inc. (AVGO), Mongodb, Inc. (MDB), Docusign, Inc. (DOCU).

Source: Zacks, August 27, 2021
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.