Social security benefits are going up again next year

Andrew Cummings
October 11, 2019

The change will take effect beginning December 31 for over 8 million SSI beneficiaries across the country and in January 2020 for more than 63 million Americans receiving Social Security.

The 2020 COLA for the nation's almost 69 million Social Security recipients is a bit higher than the 10-year average of 1.4%, but it's lower than the increase in the last two years - 2.8% in 2019 and 2.0% in 2018.

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.

More detailed information about the changes relevant to Social Security benefits in 2020 is available here.

SSA notes that $1 in benefits will be withheld for each $2 earned over $18,240.

There is a rule, a hold harmless provision, in place that doesn't allow Part B premium hikes to be larger than the Social Security COLA and about 70% of beneficiaries are covered. Beneficiaries also gain from compounding since COLAs become part of their underlying benefit, the base for future cost-of-living increases.

Schiavone points to increased health care premiums and copays, along with other kinds of insurance, as the main culprits.

Democrats are attempting to persuade more seasoned individuals they have their backs on Social Security. Voters age 65 and older went 53% for Donald Trump and 44% for Hillary Clinton in 2016, according to a Pew Research Center analysis of people who participated in its surveys and were confirmed to have cast a ballot. Those who pay into Social Security on wages will also see the maximum income cap threshold rise to $137,700 from $132,900 for their 7.65% tax (or 15.3% if self-employed).

Furthermore, a study by The Senior Citizens League found that Social Security benefits have lost one third of their buying power since 2000. "You would be overpaying COLAs", he said.

"The CPI index used to calculate the Social Security inflation could be better for retirees if [advisors] use the CPI-E", Meyer says. "During that time, Social Security didn't miss an installment". An Associated Press-NORC Center for Public Affairs Research overview from February found that 39% of Americans had nearly no certainty the program will offer the ebb and flow level of advantages in five years. Just 24% said they were very confident it would, with another 36% saying they were somewhat confident.

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