Social Security Benefits to Rise 1.6% in 2020
Social Security is a big part of retirement income planning for employees.
The Social Security Administration has announced that Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will get a cost of living adjustment (COLA) of 1.6% in 2020.
The COLA will begin with benefits payable to more than 63 million Social Security beneficiaries in January 2020. The COLA adjustment for the eight million SSI beneficiaries will begin on December 31, 2019.
Social Security is a big part of retirement income planning for employees, as it is estimated that Social Security will represent 40% of the average Americans replacement income. Cost of living increases, claiming age, marital status and work history all complicate Social Security claiming strategies.
The administration says 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. Based on that increase, the maximum amount of earnings subject to the Social Security tax will increase from $132,900 to $137,700.
People will be able to view their COLA notice online through their my Social Security account; they can create or access this at: www.socialsecurity.gov/myaccount.
Information about Medicare changes for 2020, when announced, will be available at: www.medicare.gov.