Monthly Social Security benefits for American retirees and others will increase 1.3% next year with a cost-of-living adjustment, officials announced Tuesday.
The Social Security Administration said the higher benefits for 2021 will first be given in January to more than 8 million Americans receiving Supplemental Security Income, followed by about 64 million Social Security beneficiaries.
The annual adjustment is linked to the performance of the Consumer Price Index.
Next year’s increase will be the lowest since 2017. Social Security beneficiaries saw a 1.6% adjustment for 2019 and 2.8% in 2018.
Officials also said the maximum amount of earnings subject to the Social Security tax will rise about $5,000 next year to $142,800.
“While modest [the increase] is needed to help Social Security beneficiaries and their families try to keep up with rising costs,” said AARP CEO Jo Ann Jenkins.
“The guaranteed benefits provided by Social Security and the [adjustment] are more crucial than ever as millions of Americans continue to face the one-two punch of the coronavirus’ health and economic consequences.”
Rep. John Larson, D-Conn., chairman of the House subcommittee on Social Security, said in a statement he’s pleased about the increase but cautioned that most seniors “face cost increases each year even beyond what’s reflected” in the adjustment.
Larson supports passage of the Social Security 2100 Act, under which annual increases would instead be based on a “Consumer Price Index for the Elderly” that better reflects the amount seniors pay for certain necessities.
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