Senior Finance and Retirement

With inflation surging in the U.S., Americans on Social Security could receive a significant pay increase next year.

Each year, seniors’ monthly benefit is adjusted to account for inflation. In the last two decades, as inflation has largely been absent from the economy, the monthly payment has risen only slightly. In 2021, the increase was 1.2%. That could change in 2022. 

The Senior Citizens League has calculated next year’s cost of living adjustment (COLA) and projects that Social Security benefits will increase by 6.1%. It would be the biggest increase since 1983, an era when inflation was increasing at double-digit rates.

The COLA is based on the Consumer Price Index (CPI) for Urban Consumers in July, August, and September. It’s also heavily weighted for the price of gasoline, which has risen sharply in recent months. The COLA will be announced in October, and the first adjusted benefit payment will be made in January.

Changing the formula

Meanwhile, there’s a move in Congress to change the way the benefits COLA is formulated, and that could increase benefit payments to seniors even more. Last week, Rep. John Garamendi (D-Calif.) introduced a measure to base benefit increases on the cost of things seniors use most, such as health care.

“Seniors and disabled citizens rely on Social Security benefits for a large portion of their income, and it’s about time for Social Security benefits to reflect their lifestyles,” Garamendi said. “Using a COLA that actually reflects how retirees spend their money – especially in health care – is a no-brainer that will increase benefits and make Social Security work better for the people it serves.”

Garamendi’s bill has already attracted broad support, with 23 original co-sponsorships and senior advocacy groups urging its passage. Nancy Altman, President of Social Security Works, supports the change, saying the current way inflation is measured doesn’t reflect the rapidly rising costs of prescription drugs.

“By more accurately accounting for the costs faced by Social Security beneficiaries, this legislation better prevents the erosion over time of Social Security’s modest but vital earned benefits,” she said.

With winter rolling in and the pandemic still hanging around, many seniors are looking to find more ideal vistas to retire to. The hard part is finding a close-to-perfect fit and wading through the thousands of options available with niche retirement communities.

Coventry Direct, a company specializing in life insurance, analyzed over 2,600 55+ communities, assigning numerical values for factors like affordability, amenities, and security features. Out of that came an overall score for each community which Coventry used to determine the “top retirement communities” in the U.S.

Winners and losers

When ConsumerAffairs took a look at the raw data the analysts had to pore through, it was apparent that retirees simply can’t make a snap judgment when it comes to picking somewhere to move to. There’s the cost of housing, the contemporary wrinkle of being tech-friendly, and a countless number of amenities that seniors want to make sure are available to them to make their move worthwhile.

"One of the biggest takeaways from this project that we want to emphasize is that while many of the top-performing communities are located in traditional retirement locales like Florida, Arizona, and California, our analysis uncovered vibrant, high-quality communities teeming with the kinds of amenities that make life after 55 a dream throughout the country,” Josh Koebert, a research assistant for Coventry Direct told ConsumerAffairs.

“With a little research, most people should have no problem finding a 55+ community that checks all the right boxes for their lifestyle and geographic preferences."

Taking home the top spot in the survey was ‘The Villages’ -- a site US News & World Report called “Disney World for Adults.” Situated between Orlando and Ocala, Florida, the location was rated as the “best retirement community,” scoring 95.3 out of a possible 100 points. In second place is the 11,000-acre ‘Sun City West’ in Arizona, about 30 miles from Phoenix. It received a total score of 91. 

When it came to the illusion that all retirees wind up in Florida, the analysts did some myth-busting of their own. “Our rankings actually show that it is possible to find incredibly high-quality retirement living all across the nation,” they wrote. 

“Only three of the top ten communities were located in the Sunshine State, with just as many Arizona locations showing up at the top of the rankings. Nevada, South Carolina, Texas, and California also make appearances in the top 10.”

Full rankings

From top to bottom, here are how the top 25 stacked up overall:

1. The Villages (The Villages, FL)

2. Sun City West (Sun City West, AZ)

3. Sun City Anthem (Henderson, NV)

4. On Top of the World (Ocala, FL)

5. Sun City Palm Desert (Palm Desert, CA)

6. Robson Ranch (Denton, TX)

7. Canoa Ranch (Green Valley, AZ)

8. Sun City Hilton Head (Bluffton, SC)

9. Quail Creek (Green Valley, AZ)

10. Lely Resort (Naples, FL)

11. Heritage Village (Southbury, CT)

12. Bella Vista Village (Bella Vista, AR)

13. Lake Ashton (Lake Wales, FL)

14. Stonecrest (Summerfield, FL)

15. SaddleBrooke Ranch (Oracle, AZ)

16. Sun City Peachtree (Griffin, GA)

17. Green Valley Recreation (Green Valley, AZ)

18. Sun City Grand (Surprise, AZ)

19. Pelican Preserve (Fort Myers, FL)

20. Sun City Shadow Hills (Indio, CA)

21. Sun City Lincoln Hills (Lincoln, CA)

22. Timber Pines (Spring Hill, FL)

23. Tellico Village (Loudon, TN)

24. Oak Run (Ocala, FL)

25. Siena (Las Vegas, NV)

Amenities scores vary from community to community

When it comes to amenities, the researchers say seniors favor three import factors -- exercise and wellness, entertainment, and outdoor activities. In the overall amenities ranking, there were six communities that had perfect scores:

• Sun City Anthem (Henderson, NV)

• Sun City West    (Sun City West, AZ)    

• Sun City Palm Desert    (Palm Desert, CA)

• Laguna Woods Village (Laguna Woods, CA)

• Heritage Village (Southbury, CT)    

• The Villages (The Villages, FL)

You think the government's always right? Think again. Mistakes in Social Security calculations are surprisingly common.

Government watch groups estimate that the Social Security Administration (SSA) makes mistakes on at least 3 percent of the total official earnings records it keeps.

The best way to keep an eye on your personal Social Security records is to carefully review your yearly Social Security statement, and dont be surprised if you uncover an error.

Heres what you should know.

Earnings Errors

Social Security benefits are based on your 35 highest-earning years as reported to the government by your employers. If an employer has given the government incorrect salary data or if the government has erred in recording the information, you want to get it corrected as quickly as possible.Otherwise you may not get the full amount youre entitled to when you retire.

So, when you receive your annual Social Security statement, take the time to compare the earnings listed in the statement with income listed on W-2 forms in your tax records. And if you spot a discrepancy, follow these steps:

Call your nearest Social Security office (see www.ssa.gov/locator or call 800-772-1213 to get the number) to report the error. Some corrections can be made over the phone. However you may need to schedule an appointment and go in with copies of your W-2 forms or tax returns to prove the mistake, or you can mail it in.

If you suspect a discrepancy but dont have backup records, the SSA may be able to use your employment information to search its records and correct mistakes. If the SSA cant locate your records, youll need to contact the employer to obtain a copy of your W-2 for the year in question.

Once your earnings record is corrected, SSA will send you a confirming letter. If you dont receive the confirmation within three months, contact SSA again. And double-check the correction by making sure it appears on next years statement.

If corrections arent made on the next statement you receive, start an appeals process (see www.ssa.gov/pubs/10041.html).

Note: SSA statements are mailed annually (about three months before your birthday) to everyone age 25 and over who is not already receiving Social Security benefits. If youre not receiving yours, see www.ssa.gov/mystatement.

Other Mistakes

Earnings miscalculations can also happen if the SSA didnt have your correct mailing address. If you dont receive your annual statement, thats a tip-off.

If there is a mistake, contact the IRS (SSA depends on the IRS for addresses) at 800-829-3676 and ask them to mail you the Change of Address form 8822, or print it off at www.irs.gov/pub/irs-pdf/f8822.pdf, fill it out and mail it back to the address on the form.

Two other factors that can cause mistakes are if you changed your name following a marriage or divorce, or if your date of birth in SSA records isnt the same as it appears in IRS files. Double check your SSA statement for these possible mishaps and make sure your earnings data matches the amounts on your W-2 forms.

And whenever you change your name, or if you notice a birth date error call the SSA (800-772-1213) and ask for Form SS-5, Application for a Social Security Card, and submit it with the correct information. The form can also be downloaded at www.ssa.gov/online/ss-5.html.

Calculation Errors

Even when all the earnings data is correct, the SSA occasionally errs in calculating benefits.

You can double check their calculations by using SSAs formula found at www.socialsecurity.gov, however the math is rather complex.

If you think your benefits have been miscalculated, point it out to your local SSA office and ask them to recalculate. If they do find an error, make sure you receive a confirming letter and that the correction appears on next years statement. If youre already receiving benefits, the SSA will reimburse you for the amount of the error.

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Jim Miller is a contributor to the NBC Today show and author of The Savvy Senior books.