SSA Announces 1.3 Percent COLA Increase
The Social Security Administration recently announced that the Social Security and Supplemental Security Income (SSI) benefits will increase 1.3 percent in 2021. The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million SSI beneficiaries will begin on Dec. 31, 2020. The COLA increase also applies for Americans who rely on VA disability, military retirement, and other government benefits. Changes to Medicare for 2020 have not yet been announced. When information is available, it will be provided at www.Medicare.gov.
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. Some other adjustments that take effect in January of each year are based on the increase in average wages. Most people who receive Social Security payments will be able to view their COLA notice online through their “my Social Security account.” People may create or access their “my Social Security account” online at www.socialsecurity.gov/myaccount. In addition, cost-of-living adjustments apply to the following individuals:
- Retired military veterans
- Disabled veterans
- Veterans’ pension benefits recipients
- Survivor benefit annuitants
- Surviving families of veterans
- Social Security recipients
- Federal civilian retirees
- Supplemental Security Income (SSI) recipients
- Social Security Disability Insurance (SSDI) recipients
- Medicare Extra Help and Medicaid recipients
- Federal and state food and housing assistance program participants
You can add the 1.3 percent COLA by multiplying the current award amount by 1.013.
Example: Bill would like to move in on Dec. 1, 2020. Bill’s 2020 gross Social Security monthly amount is $650. You will calculate his Social Security income as follows:
- $650 x 1.013 = $658.45 (2021 monthly amount)
- $650 x 1 = $650 (December 2020)
- $658.45 x 11 = $7,242.95 (January – November 2021)
Therefore, you would add $650 to $7,242.95 to come up with $7,892.95 (12 months) for Bill’s annual anticipated income.