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