In early December, Social Security and Social Security and Supplemental Security Income will notify beneficiaries by mail about their new benefit amount. This year, for the first time, 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.
According to the Social Security Administration (SSA), Social Security and Supplemental Security Income (SSI) benefits for more than 67 million Americans will increase 2.8 percent in 2019. This is the largest COLA adjustment in seven years.
On Thursday, Oct. 11, SSA announced that SSA and SSI’s 2.8 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 62 million beneficiaries in January 2019. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2018. (Note: some people receive both Social Security and SSI benefits). 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. The COLA affects household budgets for about 1 in 5 Americans, including Social Security beneficiaries, disabled veterans and federal retirees
More Money in Your Pocket
The Washington, DC-based AARP says that the latest COLA increase gives a Social Security and SSI beneficiary an extra $39 a month or around $468 a year. The average single retired Social Security recipient is expected to receive $1,422 in December 2018 before increasing to $1,461 a month later..
SSA says that another adjustments that takes effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $132,900 from $128,400.
Responding to last week’s COLA announcement, AARP Chief Executive Officer Jo Ann Jenkins said, “The 2.8 percent COLA announced today brings needed income security to those Social Security beneficiaries and their families who depend on their earned, modest benefits. The COLA is particularly important for the tens of millions of families who depend on Social Security for all or most of their retirement income, many of whom may have lost ground during the Great Recession. Unfortunately, the cost of living increase may not adequately cover their expenses that rise faster than inflation including health, prescription drug, utility and housing costs.”
Calls for Improving COLAS
Adds Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare, “This COLA is good news for seniors living on fixed incomes. Every extra dollar helps. But the current COLA formula (the CPI-W) is inadequate because it does not account for seniors’ rising expenses – especially housing and health care. COLAs could be improved by adopting the Consumer Price Index for the Elderly (CPI-E), which is based on retirees’ actual spending habits rather than those of the general population.”
On Friday, Oct. 12, the Centers for Medicare and Medicaid Services announced that Social Security beneficiaries will see a slight rise in their monthly Medicare Part B premiums in 2019. Part B Medicare covers physician and diagnostic services, outpatient hospital services, certain home health services and durable medical equipment.
AARP has launched the Social Security Resource Center (http://www.aarp.org/retirement/social-security/), a one-stop place for older Americans to have their Social Security retirement questions answered, including when to claim.