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October 14, 2020 COLA Special Edition

Cost-of-Living Adjustment (COLA) Information for 2021

On October 13, 2020 the Social Security Administration (SSA) announced the monthly Social Security and Supplemental Security Income (SSI) benefits will increase 1.3% in 2021.

Federal benefit rates increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W). The CPI-W measures the cost of goods and services – in other words, a person's cost of living. If inflation increases, the CPI-W also goes up signaling that it costs more to pay bills overall. An increase in benefits – often referred to as a cost-of-living adjustment (COLA) – is intended to helps to offset these costs.

The Social Security Administration will mail COLA notices throughout the month of December to retirement, survivors, and disability beneficiaries, SSI recipients, and representative payees. But, if looking for benefit amounts earlier, applicants/residents can check online using the Message Center here at my Social Security account – as soon as early December.

Average Retiree Payment

With the just-announced COLA, the estimated average Social Security payment for a retired worker will be $1,543 a month, an increase of approximately $20 from the year 2020.

Adding 1.3% Increase to 2020 Benefits Example:

$1523 X 1.3% = $19.79 more per month

$1523 + $19.79 = $1,542.79 per month

New Monthly SSA Rate Effective 01/01/2021 = $1,542.79

Tuesday, October 13, 2020 News Release

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 December 31, 2020.

SSA Fact Sheet

All COLA adjustments can be seen using this link.

Historical Social Security COLA Adjusments

Since 1975, Social Security general benefit increases have been cost-of-living adjustments or COLAs.

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