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Experience the personalized retirement guidance that brings retirement planning all in one place. Every member gets a Retirement Score plus personalized news, classes, and resources that will help them navigate their retirement with confidence.&nbsp;

Retirement All In One Place

Social Security 101

Medicare 101

Home Financing in Retirement

About the Retirement Score

Social Security announced the 2023 Cost of Living Adjustment (COLA) of 8.7% - the highest increase in the COLA since 1981. This class helps you understand what higher inflation means for your retirement and how Social Security can provide inflation protection.

About This Class

After several decades of historically low inflation, prices are on the rise again. This can spell trouble if you&rsquo;re on a fixed income, like many retirees. But you&rsquo;ve been through this before (from the 1970s) so here&rsquo;s what you need to know about inflation as you&rsquo;re approaching retirement (or maybe even already retired). One of the most important sources of inflation protection in your retirement portfolio is Social Security. That's because Social Security not only provides you lifetime income but it also comes with an annual inflation adjustment.&nbsp;
This class can help you better understand inflation, including why you should care about it, and how Social Security in particular can provide you with essential inflation protection in retirement. In this class, we&rsquo;ll look at the following subjects:
<ul>
<li style="font-weight: 400;" aria-level="1">What inflation today means for retirees</li>
<li style="font-weight: 400;" aria-level="1">When you can elect Social Security (and why this matters in a high inflation economy)</li>
<li style="font-weight: 400;" aria-level="1">Annual inflation adjustments for Social Security</li>
<li style="font-weight: 400;" aria-level="1">What retirement assets have inflation protection</li>
<li style="font-weight: 400;" aria-level="1">Strategies you can use to combat inflation</li>
</ul>

Much of the current inflation we see right now is influenced by supply chain issues in the wake of the Covid-19 pandemic. However, there are other factors involved. There has been a decade of low interest rates and price drops during 2020 created a much higher than average year-over-year inflation rate. Additionally, less labor force participation has led to the creation of fewer goods, driving up prices. With demand for goods and services higher, and supply chains strained, higher prices are expected.1 The inflation rate seems especially high when looking at year-over-year figures from 2020 to 2022, in part because there was so little spending and economic activity during 2020.2
Prior to this year, the economy experienced two decades of inflation below 5%.3 It&rsquo;s been a time of economic growth, but also low interest rates. The last time we saw a major inflation spike was in the 1970s through the early 1980s, driven by the 1973 oil shock. From 1974 to 1981, annual inflation was often between 8% and 13%. In order to combat this level of inflation, Federal Reserve Chair Paul Volcker presided over increases to the federal funds rate &mdash; to nearly 11% in 1979 and close to 20% by June 1981.4&nbsp;
<h2>How Interest Rates Move in Response to Inflation</h2>
In general, the Federal Reserve promotes policies aimed at keeping inflation right around 2% year over year.5 One of the tools the Fed uses to accomplish its goals is through interest rates. If inflation is higher, the Fed is likely to increase rates as a way to slow down the economy and keep inflation under control. High interest rates in the early 1980s worked to help bring inflation back down to 5% by October of 1982.6
The opposite approach is taken when the economy is slowing. Cutting interest rates can make borrowing money cheaper, increasing economic activity. However, when interest rates are cut, it can lead to higher inflation later. When inflation grows rapidly, the Fed is likely to institute higher interest rates as a way to rein it back.
Some of the stages of inflation that are often recognized include:7
<ul>
<li aria-level="1">Creeping: This type of inflation is mild and is often characterized by inflation less than 3% per year.</li>
<li aria-level="1">Walking: Inflation has the potential to be destructive, with the economy heating up too fast. This is often inflation that is between 3% and 10% year over year.</li>
<li aria-level="1">Galloping: Once inflation is above 10% per year, it&rsquo;s difficult for employee income to keep up with prices.</li>
<li aria-level="1">Hyperinflation: If prices jump 50% or more per month, the economy is in a state of hyperinflation. The United States hasn&rsquo;t seen hyperinflation since the Civil War.&nbsp; </li>
<li aria-level="1">Stagflation: Finally, if price inflation occurs, but there is no accompanying economic growth, the economy is said to be in a state of stagflation. This was the situation during the 1970s.&nbsp;</li>
</ul>
<h2>What This Means for Retirees&nbsp;</h2>
Rising inflation is a worry for retirees living on a fixed income. While it's unlikely that high inflation would persist for a decade like it did in the 1970s, we are likely to see a bumpy few years ahead. There are some things you can do to ride it out.
<h2>Add Protection with Inflation-Linked Retirement Assets</h2>
When planning your retirement, consider some of the accounts, benefits and assets that are linked to inflation and offer increases as price rises.
<ul>
<li aria-level="1">Social Security: Social Security benefits are tied to inflation. As the cost of living increases, so do your benefits. There are two adjustments: an annual cost-of-living-adjustment (COLA) provided by the SSA and an 8% increase every year you delay taking your benefits till age 70.</li>
<li aria-level="1">Pension: Many defined-benefit pension plans offer benefits that are tied to inflation. So, if inflation becomes a problem, your payout may be adjusted to reflect high costs.</li>
<li aria-level="1">Long-term care insurance: You can lock in a benefit designed to help cover your medical and housing costs when you get long-term care insurance. Your contract may include an inflation rider which means your benefit will grow every year by a set percentage, typically between 3% to 5%.8 This way, you will receive the care you need, no matter what&rsquo;s happening in the economy.</li>
</ul>
<h2>Evaluate Your Cost of Living and Determine Ways to Control Your Retirement Costs</h2>
<ul>
<li aria-level="1">Cost of living and location: Review your potential retirement locations. By moving to an area with a lower cost of living, you might be able to better control your overall costs, especially fixed costs, so that inflation can be better managed.</li>
<li aria-level="1">Healthcare: Consider your healthcare costs. Over time, healthcare is likely to get more expensive. Looking for areas with lower Medicare premiums, as well as using a Health Savings Account (funded before you start Medicare) can help you manage costs as you age.</li>
</ul>
<h4>SOURCES </h4>
<ol>
<li style="font-weight: 400;" aria-level="1">Tepper, Taylor. &ldquo;Why Is Inflation So High?&rdquo; Forbes, 10 February 2022, <a href="https://www.forbes.com/advisor/investing/why-is-inflation-rising-right-now/">https://www.forbes.com/advisor/investing/why-is-inflation-rising-right-now</a>. Accessed 8 February 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;How the Supply Chain Caused Current Inflation and Why it Might be Here to Stay.&rdquo; PBS, 10 November 2021, <a href="https://www.pbs.org/newshour/economy/how-the-supply-chain-caused-current-inflation-and-why-it-might-be-here-to-stay">https://www.pbs.org/newshour/economy/how-the-supply-chain-caused-current-inflation-and-why-it-might-be-here-to-stay</a>. Accessed 8 February 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;United States: Inflation Rate from 1990 to 2021.&rdquo; Statista, January 2022, <a href="https://www.statista.com/statistics/191077/inflation-rate-in-the-usa-since-1990/">https://www.statista.com/statistics/191077/inflation-rate-in-the-usa-since-1990</a>. Accessed 8 February 2022.</li>
<li style="font-weight: 400;" aria-level="1">Sablik, Tim. &ldquo;Recession of 1981-82.&rdquo; Federal Reserve History, 22 November 2013,&nbsp; <a href="https://www.federalreservehistory.org/essays/recession-of-1981-82">https://www.federalreservehistory.org/essays/recession-of-1981-82</a>. Accessed 8 February 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Why Does the Fed Care About Inflation?&rdquo; Federal Reserve Bank of Cleveland, <a href="https://www.clevelandfed.org/en/our-research/center-for-inflation-research/inflation-101/why-does-the-fed-care-get-started">https://www.clevelandfed.org/en/our-research/center-for-inflation-research/inflation-101/why-does-the-fed-care-get-started</a>. Accessed 8 February 2022.</li>
<li style="font-weight: 400;" aria-level="1">Sablik, Tim. &ldquo;Recession of 1981-82.&rdquo; Federal Reserve History, 22 November 2013,&nbsp; <a href="https://www.federalreservehistory.org/essays/recession-of-1981-82">https://www.federalreservehistory.org/essays/recession-of-1981-82</a>. Accessed 8 February 2022.</li>
<li style="font-weight: 400;" aria-level="1">Pettinger, Tejvan. &ldquo;Different Types of Inflation.&rdquo; Economics Help, 4 April 2021, <a href="https://www.economicshelp.org/blog/2656/inflation/different-types-of-inflation">https://www.economicshelp.org/blog/2656/inflation/different-types-of-inflation</a>. Accessed 8 February 2022.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Long Term Care Insurance Inflation Protection.&rdquo; LTC Partner, <a href="https://longtermcareinsurancepartner.com/long-term-care-insurance/long-term-care-insurance-inflation-protection">https://longtermcareinsurancepartner.com/long-term-care-insurance/long-term-care-insurance-inflation-protection</a>. Accessed 8 February 2022.</li>
</ol>

Social Security is likely to be one of your largest, if not the largest, sources of retirement income.&nbsp; And it comes with an annual inflation adjustment.&nbsp; Deciding when to elect Social Security is a critical decision if you are seeking to add additional inflation protection to your retirement income.&nbsp; Benefits can be collected anywhere from age 62 to 70, but you need to factor in your health, longevity, marital status, and your overall financial picture to find the best age to claim.&nbsp;
It&rsquo;s possible to elect Social Security benefits as early as age 62, but that&rsquo;s not always the best idea. At that age, your benefits would be 30% lower than if you waited until your full retirement age (or FRA) to claim your benefits.&nbsp;
Wondering what your FRA would be? It&rsquo;s all based on your birth year and month, but it&rsquo;ll be somewhere between age 66 and 67, depending on your date of birth. According to the Social Security Administration, once you reach your full retirement age, you&rsquo;re finally entitled to 100% of your benefits, which is known as your &lsquo;primary insurance amount&rsquo; (PIA).&nbsp;
Deciding when to elect Social Security can significantly impact the amount of benefits you&rsquo;ll receive, and waiting until age 70 will earn you the maximum monthly Social Security benefits.1
Claiming Social Security early will reduce your monthly benefit compared to waiting until full retirement age. If you start collecting at 62, your benefit will be permanently reduced&mdash;by approximately 30% less&mdash;than if you wait until full retirement age.&nbsp;
Then, when you hit full retirement age, you can choose to delay your benefits even further for an even better benefit: delaying benefits from your FRA up until age 70 will increase your monthly benefits by as much as 8% each year. That means you can amass a potential increase of 24% to 32%, which can be a substantial amount. However, it&rsquo;s important to keep in mind that there is no additional increase in benefits past age 70.The decision to claim early comes down to choosing a lower monthly benefit over a longer period of time or a larger monthly benefit for fewer years.&nbsp;
To recap, if you were to opt to receive benefits at 62, you would receive 70% of your &lsquo;primary insurance amount.&rsquo; If you wait until your full retirement age (FRA) of 67, you will receive 100% of your PIA. For every additional year up to age 70, you will receive an additional 8%, totaling up to 124% of your original PIA.2 Note that this applies to your own benefits that you&rsquo;ve worked for, not spousal or survivor benefits, which come with different rules. (But don&rsquo;t worry, we have classes for each that you can dive into later.) 
Let&rsquo;s assume your initial PIA is $2,500 at full retirement age. Below is an example of how your benefits can increase or decrease based on election age.&nbsp;
<img src="https://cdn.buttercms.com/oRiVhuVQc2nWVIIg5e9z" alt="When Can Elect - primary insurance am..." />
In a high inflation environment, considering delaying your social security election can be a way for you to lock in a higher monthly income later in retirement.
<h4>SOURCES</h4>
<ol>
<li style="font-weight: 400;" aria-level="1">&ldquo;Delayed Retirement Credits.&rdquo; SSA, Social Security Administration, www.ssa.gov/benefits/retirement/planner/delayret.html. Accessed 1 May 2021.</li>
<li style="font-weight: 400;" aria-level="1">&ldquo;Retirement Benefits.&rdquo; SSA, Social Security Administration, www.ssa.gov/benefits/retirement/planner/1960.html. Accessed 1 May 2021.</li>
</ol>

Every October, the Social Security Administration (SSA) makes adjustments to Social Security programs to keep pace with inflation. These adjustments then go into effect the following January. The most significant of these annual changes are typically the Cost-of-Living-Adjustments (COLA), the annual tax caps and earning limit increases.&nbsp;
<h2>Inflation Protection Through the Social Security COLA</h2>
What is COLA? Since 1975, Social Security recipients have received Cost-of-Living-Adjustments (COLA) every year. The purpose of the COLA is to ensure that the buying power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation.1 
The Social Security Administration (SSA) increased the COLA for 2023 to 8.7%&mdash;the largest increase in over 40 years.2 If you are already receiving Social Security, you&rsquo;ll be notified by mail starting in December about your new benefits. If you haven&rsquo;t started receiving Social Security the inflation adjustment will be added to your future benefit amount.&nbsp; You can review your new benefit amounts online through your my Social Security accounts at SSA.gov.
<h2>Annual Tax Cap</h2>
In addition to the COLA increase, the income subject to Social Security taxes is capped each year (called maximum taxable earnings). Maximum earnings subject to Social Security taxes for 2023 is $160,200, which is a significant increase from $147,000 in 2022.3 This means if you are working part or full time you may be subject to additional Social Security taxes. We expect to see the earnings cap continue to increase as it's the primary tool that Social Security has used to increase funding into the program.&nbsp;
<h2>Earning Limit Increase</h2>
Social Security benefits might change if you are working while collecting benefits and have not yet hit your full retirement age. If you plan to work part or even full time after you elect Social Security, you need to be aware of the potential earnings limit. 
If your income exceeds the annual earnings limit while collecting benefits (before you reach your full retirement age) your Social Security benefit will be reduced for the remainder of the year in which you exceeded that limit. However, the income that is withheld will be paid out once you reach full retirement age.
It is important to note that investment income does not count toward your annual earnings limit; the only income that counts is earned income by working for a company or as a self-employed person.4 
<ul>
<li style="font-weight: 400;" aria-level="1">If you won&rsquo;t yet reach full retirement age in 2023, you&rsquo;ll be subject to an annual earnings limit of $21,240. If you make more than that amount, the SSA will deduct $1 from your benefits for every $2 you make above the limit.</li>
<li style="font-weight: 400;" aria-level="1">If you will reach full retirement age sometime during 2023, the limit on your earnings is much higher at $56,520. But your benefits will be reduced at the rate of $1 for every $3 you make above that limit.&nbsp;</li>
<li style="font-weight: 400;" aria-level="1">The month you reach full retirement age, you will no longer be subject to a limit on your earnings.&nbsp;</li>
</ul>
To learn more about how part time work impacts your Social Security, check out our class &lsquo;<a href="https://www.silvur.com/retirement-school/working-part-time-impacts-your-benefits">Working Part-Time Impacts Your Benefits</a>.&rsquo; In this class, we also provide you with examples and strategies on how to maximize your financial future as well as taking into consideration your government benefits like Social Security and Medicare. 
<h4>SOURCES</h4>
<ol>
<li class="p1">&ldquo;Cost-of-Living Adjustment (COLA) Information for 2023.&rdquo; <a href="http://SSA.gov">SSA.gov</a>, Social Security Administration, https://www.ssa.gov/news/cola/. Accessed 13 October 2022.</li>
<li class="p1">Ibid.</li>
<li>Ibid.</li>
<li>Ibid.</li>
</ol>

The US government and insurance companies have retirement savings programs that often have built in inflation protection. This can help retirees living on a fixed income as it adjusts their benefits based on how inflation affects costs.&nbsp;
Here are some of the common ways you can use government benefits and other assets to protect your nest egg from inflation:
<ul>
<li aria-level="1">Social Security with COLA: Social Security COLA can help you protect a portion of your income from inflation. When inflation rises sufficiently, your benefits get a boost. You can increase your benefits 8% annually from Social Security by working longer and putting off claiming your benefits until later&mdash;up to age 70.</li>
<li aria-level="1">Pensions or annuity with COLA: Defined benefit plans and annuities that come with a COLA can help you maintain a certain amount of income. For example, an immediate annuity with COLA could provide you with monthly benefits to cover some of your basic expenses and supplement Social Security.</li>
<li aria-level="1">LTC insurance with inflation rider: Another option is to use long-term care insurance that comes with an inflation rider. That way, the benefit increases along with inflation. So, as costs rise while you&rsquo;re in long-term care, your insurance benefit will reflect that. When used in conjunction with other inflation-linked assets, this can help you manage the heavy burden of healthcare costs.</li>
<li aria-level="1">TIPS and I-bonds: Treasury inflation-protected securities and Series I bonds can provide you with relatively safe investments that increase their payout with inflation. There are limits on how much you can invest with some of these bonds, but they can be one way to shore up a portion of your portfolio while you employ other strategies. Keep in mind that I-bond yields are high right now due to high inflation, but the yield will drop in the future as inflation falls.</li>
</ul>
On top of that, investing in real estate and equities can be a good way to grow your investment nest egg. Although prices fluctuate with the market, you may end up with a good return as a long-term investment. Carefully consider how your investment portfolio can work in conjunction with other assets to create a plan that allows for inflation-beating growth at the same time you defend against inflation.

There are several things you can do to combat inflation both before and after you retire.
<h2>Work as Long as You Can</h2>
If you can work longer, you can earn more money, allowing you to set more aside for the future. Even part-time employment may get you healthcare and 401(k) contributions. Even if you don&rsquo;t get access to a 401(k), you can make more contributions to an IRA.
<h2>Delay Social Security Benefits&nbsp;</h2>
The longer you wait to claim your Social Security benefits, the higher your monthly income from Social Security. Remember benefits have COLA every year and each year you delay your benefits you get an 8% increase up to age 70.
<h2>Budget for Higher Costs and Spending</h2>
Factor higher costs over time into your budget. Assume that you will end up paying more each year for regular costs. Once you&rsquo;ve done that, make a plan for smart spending in retirement, including where you live, how to cut costs, and how to use comparison-shopping and discounts to stretch your money further.
<h2>Stay Invested&nbsp;</h2>
What should you do with your cash or asset allocation? One of the biggest risks in a high inflation environment is being under invested. With bank accounts today still yielding close to 0%, it's hard to maintain your purchasing power when inflation is rising. Staying invested in investments like real estate and equities can help your portfolio keep up with inflation. When deciding how much to be invested in &ldquo;risk&rdquo; (e.g. stocks, real estate) vs &ldquo;lower risk&rdquo; (e.g. bonds) assets, start by reviewing how much you are depending on guaranteed sources of income like Social Security, pensions, and annuities to cover your essential spending. The more you can cover your spending with guaranteed sources of income&mdash;many of which may have inflation protection built-in&mdash;the more comfortable you can be staying invested in assets like equities and real estate.
<h2>Consider an Annuity</h2>
An annuity can act as a guaranteed paycheck throughout retirement based on fixed amounts. You don&rsquo;t need to use all of your nest egg to purchase an annuity, but you could potentially use a portion of it to get an annuity whose payout offers you a way to secure enough each month for basic costs. Many annuities include inflation riders which give you the opportunity to have your income increase in line with inflation.
<h2>Sequence of Returns Risks&nbsp;</h2>
One type of risk, known as sequence of returns risk, focuses on what happens when your investment returns are low at the beginning of your retirement. For example, if a stock market crash happens in the early years of your retirement, your returns are lower, but you still need to make withdrawals. This can reduce the overall amount in your portfolio as you have to sell low in order to meet your needs. On top of that, because those assets are no longer in your portfolio, you might not see higher returns later.
If you&rsquo;re retiring now, consider your asset allocation and which assets are susceptible to market swings. Pay attention to how some assets might be riskier than others. Consider a strategy that allows you to plan for accessing your assets in a way that reduces immediate losses due to market swings.
<h2>Choose Where You Live Carefully&nbsp;</h2>
Finally, consider moving to an area with a lower cost of living than your current situation. Take into account taxes, which states levy taxes on Social Security benefits, inheritance and gift taxes, and other costs like home prices, healthcare costs, and expenses like groceries and gas.

We&rsquo;re living in a higher inflation environment and for many soon to be retirees, and retirees, this poses risk to their retirement security.&nbsp; One source of inflation protection in your retirement portfolio is Social Security.&nbsp;&nbsp;
In this class we learned that:
<ul>
<li style="font-weight: 400;" aria-level="1">Choosing when to elect Social Security can have a significant impact on your retirement income.&nbsp; By waiting until 70 years old, your social security will be 24% higher than if you elected at full retirement age.&nbsp; If you elect early it can be up to 30% lower</li>
<li style="font-weight: 400;" aria-level="1">Every year Social Security provides an annual cost of living adjustment to help retirees navigate inflation.&nbsp; For 2023 the increase is 8.7%, the highest in over 20 years</li>
<li style="font-weight: 400;" aria-level="1">Other sources of inflation protection in retirement include annuities or pensions with inflation protection, TIPs and inflation riders on long term care insurance policies</li>
<li style="font-weight: 400;" aria-level="1">Don&rsquo;t forget that there are key decisions you can make that will impact your cost of living in retirement.&nbsp; Where you choose to live, and what the associated cost of living and health care costs are, can be some of the most important drivers of ensuring your savings last a lifetime.</li>
</ul>

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Social Security announced the 2023 Cost of Living Adjustment (COLA) of 8.7% - the highest increase in the COLA since 1981. This class helps you understand what higher inflation means for your retirement and how Social Security can provide inflation protection.

Learn about the updates taking effect in 2023 and how they may impact your Retirement Score.

We&rsquo;re updating our data to reflect the upcoming changes for 2023. You may notice a change with your Retirement Score&mdash;don&rsquo;t be alarmed. This annual update ensures that your Retirement Score reflects the latest data that includes return expectations, inflation, Social Security benefit estimates, and Medicare costs.
<h1>Your Retirement Score Update&nbsp;</h1>
You may see a larger than usual change with your Retirement Score in 2023. The driver of this change is primarily the change in long term return expectations for retirement portfolios. After a challenging year where equities&nbsp;fell 19.44% and the 10 years US Treasury rates increased from 1.51% to 3.73%, global market strategists expect that we will see materially higher return from portfolios in the next decade. This is based on a view that we will have a more normalized bond market where consumers can expect yields in the 3-4% range (rather than 0-1%) and off a lower equity level, higher equity returns from here. Our long-term return assumptions on retirement savings increased to 6.09%, previously at 4.46%, on a 60/40 stock-to-bond portfolio.&nbsp;
Note: Higher Retirement Scores will see a larger change because our updates to Retirement Score assumptions will compound at a higher rate over time.
<h1>2023 Factors that Affect Your Score</h1>
Your Retirement Score aggregates all the different annual changes from Medicare, Social Security, taxes, and market returns to show you how long your money will last. Below, we break down how each factor contributes to changes to our member&rsquo;s Retirement Scores.&nbsp;
<h2>Medicare</h2>
Retirement Scores generally increased modestly based on this year&rsquo;s expected reduced Medicare costs. 2023 Medicare premiums and costs fell slightly compared to the previous year. Our projected retirement healthcare costs include Medicare&rsquo;s Part B, Part B deductible, and estimated out-of-pocket expenses. Data provided by Medicare.gov.&nbsp;
Check out <a href="https://www.silvur.com/retirement-school/2023-annual-updates/original_medicare_parts_a_and_b" rel="follow noopener" target="_blank">this lesson</a> on Medicare&rsquo;s 2023 annual updates.
<h2>Social Security</h2>
The 2023 Social Security updates generally contribute to a net positive to Retirement Scores because the 2023 cost-of-living adjustments (COLA) increases retirement income both in 2023 but also provides a higher base for the years following 2023. However, high income earners will see more of their income subject to Social Security taxes going forward, which may reduce Scores. We update our data to include cost-of-living adjustments, maximum yearly taxable earnings that are subject to Social Security, average wage indices, and &ldquo;bend points&rdquo; (a calculation used to determine your benefits). Data provided by SSA.gov.&nbsp;
Learn more about Social Security's largest COLA increase in <a href="https://www.silvur.com/retirement-school/2023-annual-updates/2023-annual-changes-to-social-security" rel="follow noopener" target="_blank">this lesson</a>.
<h2>Taxes</h2>
As the federal tax brackets adjust higher to account for inflation, Retirement Scores generally increased by less than 6 months. Our tax updates include federal tax rates, capital gains taxes, IRA contribution thresholds, RMD tables, and contribution limits for IRAs and 401(k)s. We adjust state tax rates at the end of Q1 2023. Data provided by IRS.gov.
Find out what the new income brackets are for 2023 <a href="https://www.silvur.com/retirement-school/2023-annual-updates/tax-inflation-adjustments-for-the-2023-tax-year" rel="follow noopener" target="_blank">here</a>.
<h2>Return Expectations</h2>
This year, we&rsquo;ve updated our return assumptions to the following: 7.33% for equities and 4.23% for bonds (or 6.09% for a 60/40 stock to bond portfolio). This resulted in a higher return estimate of 6.09% (previously at 4.42%). This is one of the main drivers of overall changes in Retirement Scores and depending on your age and savings could result in material updates to your score. 
Similar to the process used by leading pensions, endowments and foundations, we use a 10-20 year stock and bond return assumption to calculate your retirement savings growth over time. We apply our return assumptions to estimate longer term returns on your savings, and not over the next year or two. In addition, our updates include the average return assumptions of four respected asset managers who collectively manage several trillion of retirement assets for pensions, endowments and foundations.&nbsp; The adjustments made for 2023 are unusual, due to the significant changes we saw in both bond yields and stock market valuations through the course of 2022.
<h2>Inflation</h2>
Given expectations of higher inflation in the near and medium term, we updated our long term inflation assumption from 2% to 2.6%.&nbsp; Similar to the process for updates to return expectations, we use a 10-20 year inflation assumption to calculate your retirement savings growth over time.&nbsp; This update impacts both your spending, but also impacts wage growth and future social security annual cost of living adjustment.
<h1>Key Takeaway</h1>
Get the most accurate Retirement Score by updating your retirement profile in Silvur. Here are some tips to maintain your Score:
<ol>
<li style="font-weight: 400;" aria-level="1">Update Your account balances:&nbsp; You can update your account balances under the Net Worth section. If you haven&rsquo;t updated your account in a while, you&rsquo;ve likely seen your savings shrink in 2022 due to the selloff in equities and the increase in bond yields. Regularly maintaining your account balance will help you get a more accurate picture of your Retirement Score.</li>
<li style="font-weight: 400;" aria-level="1">Check Your Zip Code:&nbsp; Your score is personalized to where you live</li>
<li style="font-weight: 400;" aria-level="1">Check Your Medicare: &nbsp;We default you into a plan that includes a supplemental plan</li>
<li style="font-weight: 400;" aria-level="1">Review Your Social Security Election: Social Security may be your largest retirement asset.&nbsp; Our Social Security calculator allows you to adjust when you elect social security and see the impact your longevity has on your lifetime benefits.</li>
</ol>

Learn about the updates taking effect in 2023 and how they may impact your Retirement Score.

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Connect your members to retirement-ready products and services. Whether it's your loans and wealth management services or a partner’s medicare solution, you can help members with their entire retirement wallet. 

Grow and Diversify Revenue

We take your member’s security seriously. That's why we limit the amount of data we collect and we use over 7,000 external data points to power our zip code level tools and calculators. Silvur follows industry best practices while protecting member data.

Legal Info

Silvur Services LLC