Social Security beneficiaries will see a 1.6 percent increase in their retirement earnings in January 2020, due to the Cost Of Living Allowance (COLA) that occurs every year. This increase is lower than the increase in 2019 at 2.8 percent, but it is still higher than the average over the past decade, which was 1.4 percent. The increase will average about $24 per month and $288 per year for individuals.
Cost of Living Allowances, or COLAs, are meant to offset the effects of inflation of fixed incomes. This was first introduced in 1950 when Congress first legislated an increase in benefits. Many retirees count on their Social Security as the largest source of income, so the COLA increase will help Social Security beneficiaries, as well as their families, keep up with the rising costs of living. Although this is a modest increase, this increase typically does not keep up with rising prices as most older adults face increases in living expenses, such as housing, transportation and, most of all, health care and prescription costs. AARP found that, in 2017, retail drug prices increased by twice the rate of inflation, and it has exceeded the inflation rate for at least 12 consecutive years. Overall, in 2019, about 64 million Americans received over one trillion dollars in Social Security benefits. Nearly nine out of ten individuals, age 65 and older, receive Social Security benefits.
As Social Security is increasing, Medicare Advantage plan premiums are set to decrease by 14% throughout 2020, to an estimated monthly $23. This is set to impact one-third of Medicare’s 60 million beneficiaries who belong to the private insurance plans. If you or a loved one needs assistance with Medicare-related issues, please contact the Agency’s APPRISE Program at (814) 946-1235 or 1-800-245-3282.
*Information provided to Blair Senior Services, Inc. from American Association of Retired Persons (AARP).