GRF assessment hike softened by projected SS COLA increases

GRF PRESIDENT’S MESSAGE

by Marsha Gerber

GRF president

While assessment increases are never welcomed, you do have some financial elements working in your favor. First, when many older adults say they’re on a fixed income, that’s not really true. You’re on Social Security, where your check rises in step with inflation. Few active workers can claim that automatic jump in income.

In 2022, the average Social Security recipient gets $1,656 monthly. On Sept. 13, a Senior Citizens League analyst predicted the 2023 cost-ofliving increase will be 8.7%. If correct, that would boost the average Social Security check $144 per month and the average annual payment over $20,000 for the first time in history.

Here is another, perfectly timed oddity. The Centers for Medicare and Medicaid Services predicted that 2023 Medicare Part D premiums will decline about 2%. Part B is expected to go down too, perhaps as much as $5 to $10 a month.

There may be promising news on inflation as well. Economists for Fannie Mae’s Economic and Strategic Research Group predict the Consumer Price Index will decline from its current 8.5% annualized rate to just 1.8% by December 2023.

Forbes magazine’s John Tobey suggests retirement nest eggs are set to grow again. Tobey noted the incredible cycle of bad news—inflation, supply chain issues, Ukrainian war, labor shortages and post-pandemic uncertainties. Tobey thinks all these troubles have been baked into the market— perhaps setting the stage for a return to historically routine yields.

The bottom line for you? Yes, you’ll have a higher bill from GRF and maybe your Mutual. We have to recover from 2022 budget assumptions we were compelled to make in June 2021, before roaring inflation rapidly made all our planning obsolete.

However, if you’re the average Social Security recipient on Medicare, you’ll have an extra $150 or so to balance your monthly household budget. Inflation is expected to ease significantly, and your investments may produce more income than you’ve experienced during the past months.

It’s wise to be cautious. But remember that you live in one of Southern California’s most affordable places. In our region, nearly half of all renters and owners pay more than 30% of their income for housing. The U.S. Department of Housing and Urban Development defines this as being “housingcost burdened.”

That’s much less likely in Leisure World. When you applied to purchase in Leisure World, Stock Transfer affirmed you had income at least four times greater than your monthly assessment and property tax bill. That means your housing costs should not exceed 25% of your income.

It’s also a lot cheaper inside the wall. In Seal Beach proper, the average rent for an 800-square-foot apartment is over $29,000 a year. In our community, the average annual housing cost, including taxes, is $7,800.

I realize the Mutual and GRF assessment increases are concerning to members who for 30 years have never seen annual inflation above 4%. But remember to soothe your fretfulness with the knowledge that you’re guaranteed a significant increase in your Social Security payment and lower Medicare premiums. Your IRAs may start adding more to your annual income, and experts predict inflation will dramatically moderate.

And because you live in an incredibly inexpensive coastal California community, you’re far ahead of your friends who live outside Leisure World’s walls.