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According to a new estimate released Thursday by the Senior Citizens League, the 2020 COLA is expected to represent a 1.6% increase, which would amount to about $ 23.40 per month for the average beneficiary.
This compares to the $ 40.90 beneficiaries received in 2019 from a COLA of 2.8%.
This could also be bad news, as the Medicare Part B premium is expected to rise by $ 8.80 a month, compared with $ 1.50 a month between 2018 and 2019.
"If premiums increase by $ 8.80 or more and if the adjustment to the cost of living is 1.6%, according to our estimates, social security recipients benefiting from the benefits of The order of $ 550 or less may see the premiums of Part B take up all of their COLA. Mary Johnson, Social Security Policy Analyst at TSCL, said in a statement.
The final COLA for 2020 will be announced next month.
Cost-of-living adjustments, which began in 1975, are being implemented to counter the effects of inflation. But consumer costs seem to be rising much faster than the purchasing power of social security benefits.
According to a study by the Senior Citizens League, between January 2000 and January 2019, COLA increased social security benefits by about 50%. However, the costs associated with the types of goods and services generally purchased by recipients increased by more than 100% over the same period. In the past year, the fastest increase in costs has been in prescription drugs, fresh fruits and vegetables.
In 2019, the cost-of-living adjustment was 2.8%, the largest increase in checks in seven years. He raised the average check of beneficiaries by $ 39 a month, or $ 468 a year. However, 78% of respondents in the Senior Citizens League survey said their monthly expenses had increased by more than $ 39.
Overall, the group claims that social security benefits have lost 33% of their purchasing power since 2000.
The COLA for 2018 was 2%, but was largely seen to be offset by an increase in Medicare costs.
There was an increase of 0.3% in 2017 and no adjustment the year before.
Even in years with minimal or no increase in COLA, retiree costs continued to rise, the report noted.
At the same time, Massachusetts Democrat Elizabeth Warren – a presidential candidate of 2020 – on Thursday released a plan to expand social security by raising taxes on American payroll and investment income the most rich. Oregon Democratic Senator Ron Wyden on Thursday unveiled details of his plan to increase capital gains taxes, which he said would use revenues to boost the solvency of the program.
Under the current funding arrangements, Social Security reserve funds are expected to be exhausted in 2035, when the program will no longer be able to pay benefits in full.
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