Last October, seniors on Social Security got some good news -- that their benefits would be increasing by 5.9% in 2022, marking the largest cost-of-living adjustment (COLA) recipients had gotten in years. But while a 5.9% raise might seem generous, so far, it's not doing seniors all that much good.
The reason? Inflation has been rising at a much faster pace. In February, the cost of consumer goods was up 7.9% on an annual basis. And we could be in for more months of price increases across most spending categories, from groceries to gas.
If your Social Security raise has been falling short so far this year, you're in good company. Here's an easy way to boost your income -- and prevent a scenario where you end up struggling financially.
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Don't rush to raid your nest egg
If your Social Security benefits aren't covering your living costs, you may be inclined to start taking larger withdrawals from your IRA or 401(k) plan. But that could end up being a dangerous move.
The money you have socked away in savings is supposed to last you throughout retirement. And without a crystal ball, you can't predict how many years that money will need to cover. But if you start withdrawing extra funds now to cope with higher living costs, you might deplete your savings prematurely, leaving yourself in a dire situation later on in life.
If you own a home, you may have other options for generating income. Those could include renting out some space, like a finished basement or garage, or even renting out a parking spot if you have an extra one in your driveway. But not everyone owns a home in retirement. And even if you do, your home may not be conducive to welcoming a tenant.
That's why getting a part-time job may be a more viable solution. These days, the labor market is loaded with opportunities, and that extends to the gig economy. So whether you're willing to commit to a preset schedule or want something flexible, chances are, you'll find some sort of job that serves the very important purpose of boosting your income at a time when you really need it.
Of course, the benefits of part-time work extend beyond just a paycheck. Holding down a job could end up being a good thing for your mental health as well as your physical health. And that could actually help you save money on medical costs, thereby stretching your income.
Plus, working is a low-cost way to stay entertained. And at a time when spending more on leisure may not be easy or possible, that's important.
Give yourself a more generous raise
Your Social Security raise may be falling short this year due to rampant inflation. But that doesn't mean you can't create your own income boost. Before you start withdrawing extra money from your nest egg, try seeing what work opportunities are available. You may be surprised at how easy it is to find a job that suits your needs and schedule.
