INDIANAPOLIS (WTHR) - Nearly 69-million Americans can expect to see an increase of 1.6 percent in Social Security benefits in 2020, the Social Security Administration announced Thursday.
The 1.6 percent cost-of-living adjustment (COLA) will begin in January, 2020. More than 63 million Social Security beneficiaries and more than 8 million Supplemental Security Income beneficiaries should see their benefits at the turn of the year.
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.
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, tells the Associated Press 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 costs, as the main culprits. He expects that part of his COLA for 2020 will be eaten up by an increase in Medicare's "Part B" premium for outpatient care, which hasn't been announced yet.
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 normally get a letter in early December stating their new benefit amount. Most people who receive payments can check their COLA notice online through their my Social Security account.
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 Associated Press contributed to this report.