You Just Might Get A Raise After All

Retirement, Income, Tax & Estate Planning.

You Just Might Get A Raise After All

August 27, 2020 Medicare Newsletter Social Security 0

According to Kiplinger, “Inflation has been on a roller coaster in 2020. First, COVID-19 disruptions cratered prices for gasoline, travel, even car insurance. Summer rebounds in those commodities, as well as increases for in-demand items like used cars, meat and haircuts, have put the consumer price index back on a more normal trajectory, one that will likely mean an increase in the Cost of Living Adjustment (COLA) for 2021.”

I know I wrote a few months back that there would most likely be no cost of living increase in Social Security for 2021. But, “The Kiplinger Letter is now forecasting a 1.2% increase in the 2021 COLA, which should be welcome news to retirees and others who receive Social Security benefits.”

Here’s a little history of Cost of Living Adjustments over the past 12 years.  If you average out the gains over this period, you’re looking at a 1.75% increase per year.

History of Social Security COLA Adjustments, 2009-2020

  • 2020: 1.6%
  • 2019: 2.8%
  • 2018: 2.0%
  • 2017: 0.3%
  • 2016: 0%
  • 2015: 1.7%
  • 2014: 1.5%
  • 2013: 1.7%
  • 2012: 3.6%
  • 2011: 0%
  • 2010: 0%
  • 2009: 5.8%

Generally, when Social Security COLAs kick in so do higher Medicare deductions from Social Security checks.  For most people, Medicare is $144.60 per month right now. We don’t know what will happen there, so stay tuned for more info as it is released.

So on that bit of potentially good news, have a good weekend.
Peter