A 2.8 percent cost of living adjustment (COLA) announced by the Social Security Administration yesterday is welcome, but not enough to cover many retirees’ rising healthcare and housing costs, according to the AARP.

In addition, new AARP research shows that many Americans who begin taking Social Security benefits do so with minimal understanding or research and, after benefits commence, wish they had waited longer to make their claim so their benefit is larger.

“The 2.8 percent COLA announced today brings needed income security to those Social Security beneficiaries and their families who depend on their earned, modest benefits,” said AARP CEO Jo Ann Jenkins. “The COLA is particularly important for the tens of millions of families who depend on Social Security for all or most of their retirement income, many of whom may have lost ground during the Great Recession.”

The 2.8% increase, which beneficiaries will receive in 2019, is the program’s largest net COLA in seven years.

The average monthly Social Security payment today is $1,404, which accounts for the 2% COLA recipients got for 2018, according to the Social Security Administration. That adds up to an annual benefit of $16,848, which will increase by just $39.31 monthly in 2019.

But is it enough for the 62 percent of aged beneficiaries who lean on their monthly payout to account for at least half of their income? Or the 22.1 million people, who according to the Center on Budget and Policy Priorities, are kept out of poverty thanks to their Social Security checks? 

“Unfortunately, the cost of living increase may not adequately cover their expenses that rise faster than inflation including health, prescription drug, utility and housing costs,” Jenkins said.

Advisor Joe Breslin, a partner in Armstrong Dixon in Baltimore, MD, said: “This increase, along with the recent rise in deposit interest rates, should help retirees and savers maintain their standard of living.” While SS benefits were “never intended to be the sole source of income for retirees, many are reliant upon Social Security to meet their monthly expenses, which increase over time,” Breslin added.

For advisors who work with pre-retirees, new AARP research found that while Americans are a bundle of contradictions when it comes to Social Security benefit expectations, what they don’t know may very well be hurting them.

Not surprisingly, American seniors’ want it all. They want to receive the highest amount possible in their Social Security checks. Yet they also want those checks to start coming sooner rather than later—a decision that leads to smaller checks, according to the AARP survey that asked older Americans 65 plus where they get their Social Security and Medicare information, what influences their decisions and where gaps in knowledge exist

The most common age people start drawing Social Security retirement benefits is 62, the earliest possible age. About 39% of Americans opt to start getting checks then, and 51% start collecting benefits before age 65.  Just 4% wait until the maximum claiming age of 70, AARP results showed.

Receiving the highest possible Social Security check was “very” or “somewhat” important to 75% of respondents while getting checks as soon as they could was rated as high for 71% of adults surveyed. The two factors are at odds since the longer someone waits to claim Social Security retirement benefits (up to age 70), the larger their monthly check will be.

Meanwhile, Americans’ research and decision-making starts late in the game for many. Despite the significant and lasting financial implications of the decision, 73% of Social Security recipients waited to weigh the options until they were within two years of when they ultimately claimed benefits, and 43% waited until they were within one year.

Despite relatively quick decision making—as well as the divergent desires of early claiming and higher checks— only four in ten (36%) Social Security benefit recipients were able to name an issue that they wish they had understood better back when they were deciding when to claim benefits.

The most common wish articulated by seniors who did answer the question regarding Social Security? They wish they had waited longer to start collecting their checks.

It is also noteworthy that advisors and financial professionals are not mentioned as a source of information regarding Social Security decisions.

Most seniors’= said they got information to make their decision about benefits from the Social Security Administration (62%). In addition, 38% asked friends and 32% consulted family. The most common source of information about Medicare coverage is health insurance companies (44%), followed by the Centers for Medicare and Medicaid Services (37%). About 49% of respondents did not know they can get free, personalized help through their state’s health insurance assistance program.

When asked about Medicare, seniors’ most common wishes were for more details about Medicare costs, coverage and supplemental insurance. The survey found awareness of the annual open enrollment to be high (87%); however, just 51% of Medicare enrollees say they regularly compare Medicare coverage options.

The AARP’s national survey was conducted by the University of Chicago in September, 2018 and included 1,236 adults ages 65 and older currently either receiving Social Security retirement benefits (1,071 respondents) or covered by Medicare (1,208 respondents).