Sunday, November 29, 2020
Breaking News

Social Security Announces 1.6 Percent Benefit Increase for 2020

From the Social Security Administration:

Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will increase 1.6 percent in 2020, the Social Security Administration announced yesterday.

The 1.6 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 63 million Social Security beneficiaries in January 2020. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2019. (Note: some people receive both Social Security and SSI benefits). The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.

Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $137,700 from $132,900.

Social Security and SSI beneficiaries are normally notified by mail in early December about their new benefit amount. Most people who receive Social Security payments will be able to view their COLA notice online through their my Social Security account. People may create or access their my Social Security account online at www.socialsecurity.gov/myaccount.

Information about Medicare changes for 2020, when announced, will be available at www.medicare.gov. For Social Security beneficiaries receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2020 are announced. Final 2020 benefit amounts will be communicated to beneficiaries in December through the mailed COLA notice and my Social Security’s Message Center.

The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

 

Here’s an article that ran in the Seattle Times that is also a good read. Click here to view.

Retiree checks to rise modestly amid push to expand benefits

WASHINGTON (AP) — Millions of retirees will get a modest 1.6% cost-of-living increase from Social Security in 2020, an uptick with potential political consequences in an election year when Democrats are pushing more generous inflation protection.

The increase amounts to $24 a month for the average retired worker, according to estimates released Thursday by the Social Security Administration. Following a significant boost this year, the cost-of-living adjustment, or COLA, for 2020 reverts to its pattern of moderate gains.

But seniors and advocates complain that the inflation yardstick used to determine the annual adjustment doesn’t adequately reflect their costs, mainly for health care.

The COLA affects household budgets for about 1 in 5 Americans, nearly 70 million people, and that includes Social Security recipients, disabled veterans and federal retirees.

Criticism of the COLA formula has been amplified by Democratic presidential candidates and congressional Democrats. That’s helped to shift the Social Security debate from a near-exclusive concern with the program’s solvency to a focus on expanding benefits, including but not limited to the cost-of-living adjustment.

“Most of the discussion about Social Security is about how can we promise more rather than how can we keep the promises we’re already making,” said conservative retirement policy expert Charles Blahous, who as a former public trustee of Social Security once helped oversee its finances.

With the COLA, the estimated average monthly Social Security payment for a retired worker will be $1,503 a month starting in January.

Joe Schiavone, who retired from flooring sales and lives on Florida’s Space Coast, says it feels like he’s not keeping up.

“My biggest concern is that your money is buying less and less,” said Schiavone, who’s in his early 80s. “The figure that they use for the rise in the cost of living to me is very erroneous.”

Schiavone points to increased health care premiums and copays, along with other kinds of insurance, as the main culprits. He expects that part of his COLA will be eaten up by an increase in Medicare’s “Part B” premium for outpatient care, which hasn’t been announced yet.

Roughly 1 in 2 seniors live in households where Social Security benefits provide at least half the total income. “None of the jobs I worked on in my life had any sort of pension or 401(k) plans,” said Schiavone.

He’s wary of politicians’ promises about Social Security. “I very rarely believe what anybody says in a campaign,” said Schiavone. “I really don’t know what to believe.”

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