Countless Americans rely on Social Security to stay afloat financially in retirement. But for years, enrollees have been struggling to keep up with their living costs. The Senior Citizens League reports that retiree expenses rose by over $119 per month in 2016, yet Social Security's meager 0.3% cost-of-living adjustment (COLA) that year only put an extra $5 in the average recipient's pocket, if that. In fact, most beneficiaries didn't see a boost at all, because a rise in Medicare Part B premiums swallowed that COLA up whole.

It's therefore somewhat encouraging to hear that Social Security recipients might get a more significant boost come 2018. According to the latest report by the Social Security Board of Trustees, current beneficiaries can expect a 2.2% percent COLA for 2018, which is far better than the 0.3% increase they got in 2017, and worlds better than 2016's non-existent increase. Additionally, because the latest projections also indicate that Medicare Part B will remain unchanged next year, there's a good chance seniors will get to keep that $28 in full.

Two Social Security cards lie on top of a hundred-dollar bill.


Still, it's a small victory to celebrate. Based on what the average beneficiary receives today, that 2.2% boost translates to roughly $28 a month for the typical senior. But that's nowhere close to the $119 a month most retirees need to keep up with their growing expenses.

Furthermore, this COLA is by no means official. Enrollees will need to wait until the fall to hear whether they'll be getting their hands on that additional $28 a month, and whether their Medicare Part B premiums will indeed hold steady.

And let's not gloss over the fact that COLAs aside, Social Security is still facing a pretty dire shortfall within two decades' time. The latest projections confirm what we were already told last year -- that without intervention from Congress, the program's trust funds are set to run dry come 2034, at which point Social Security will manage to pay out only about 77% of scheduled benefits. And for today's younger retirees who don't have independent savings, that could spell major trouble down the line.

Take matters into your own hands

Whether you're a current beneficiary, a soon-to-be retiree, or a younger adult who's decades away from leaving the workforce, it pays to take a step back and acknowledge that although Social Security is by no means going away anytime soon, it's also not enough to sustain the average American. The typical current beneficiary collects roughly $1,360 a month, or $16,320 a year. Given that the average 65-year-old couple today is looking at $400,000 or more in healthcare costs throughout retirement, that's hardly enough money to live off -- COLA or not.

If you're already retired, don't have savings, and are struggling to survive on your limited Social Security benefits, you should strongly consider finding part-time work to bring home some added income. It's a far better alternative to racking up debt as a senior. Similarly, you might look into downsizing your living space or moving to an area of the country that's more affordable to stretch your limited Social Security dollars.

An elderly couple sit on a sofa, looking concerned as they read a bill.


If you're close to retirement but haven't yet pulled the trigger, examine your savings and see whether they're likely to hold up. The Economic Policy Institute (EPI) reports that households aged 56 to 61 have a median savings of just $17,000, which won't do a great job of supplementing however much Social Security income you get your hands on. Furthermore, the EPI has found that more than 40% of households nearing retirement have no savings at all, so if you're one of them, you'd be wise to work a few extra years and bank however much cash you can set aside during that time.

Finally, if you're decades away from retirement, consider this your opportunity to avoid a situation where you're reliant on Social Security in the first place. Given the potential for future cuts in benefits, you're better off building your own nest egg and using whatever cash you collect from Social Security as gravy. Assuming you can invest your money at an average annual 7% return, which is a few points below the stock market's average, setting aside $300 a month for 30 years will leave you with $340,000 in savings -- and that's enough to not have to worry about whether you'll be getting a COLA year after year.

While a modest Social Security COLA for 2018 is better than no increase at all, unfortunately, it's not going to do most seniors much good. Still, let's hope this COLA comes through -- because millions of Americans are counting on it nonetheless.