The Social Security Administration announced Tuesday that Social Security beneficiaries will see a 1.3 percent increase to their monthly checks in 2021.
The cost-of-living adjustment will start with benefits payable to over 64 million Social Security beneficiaries in January 2021, the administration said in a news release.
The increased payments will start Dec. 31, 2020, for 8 million beneficiaries.
The annual COLA increase is tied to the Consumer Price Index determined by the Department of Labor’s Bureau of Labor Statistics.
The COLA affects the personal finances of 1 in 5 Americans, including Social Security recipients, disabled veterans and federal retirees, according to CBS News.
The Senior Citizens League, a nonpartisan advocacy group for older Americans, also estimated a 1.3 percent boost based on the BLS data, CNBC reported.
After the 1.3 percent increase, retirees’ estimated average monthly benefit will increase from $1,523 to $1,543 in 2021.
The average monthly benefit for disabled workers will increase from $1,261 to $1,277.
Based on the increase, the Social Security taxable maximum will also increase from $137,700 to $142, 800, according to the Social Security Administration.
The 1.3 percent cost-of-living adjustment is smaller than the adjustment retirees and other beneficiaries saw in 2020 and 2019.
In 2019, they received a 1.6 percent increase, and in 2019, they received a 2.8 percent increase.
However, the increase is larger than the 0 percent increase beneficiaries saw in 2010, 2011 and 2016 as well as the 0.3 percent increase in 2017.
The average cost-of-living adjustment since 2010 has been 1.4 percent.
In the face of the coronavirus pandemic, Social Security beneficiaries have had a tougher time stretching their benefit checks, according to CNBC.
The Senior Citizens League is asking Congress for an emergency 3 percent COLA to help beneficiaries in 2021.
“We are looking at a period where there are growing inadequacies in Social Security benefits, particularly for people with lower-to-middle benefits,” Senior Citizens League analyst Mary Johnson told CBS News.
The COLA is only part of the annual financial calculation for seniors; Medicare’s “Part B” premium is expected to be announced this fall as well.
“There’s a lot of uncertainty with regard to the effect of the coronavirus on the cost of the premium for next year,” Casey Schwarz from the Medicare Rights Center advocacy group said.
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