The average retirees’ estimated monthly benefit will increase by $20, to $1,543 from $1,523 after the 1.3% increase, according to analysis from CNBC. Disabled workers’ average monthly benefit is estimated to go up by $16, to $1,277 from $1,261.
Increased payments to over 8 million SSI beneficiaries will begin December 31, and the 1.3% cost-of-living adjustment, or COLA, will pay out more in benefits to over 64 million beneficiaries starting January 2021. Yearly COLAs are tied to the Consumer Price Index or CPI, which is determined by the Department of Labor. The benefit gain is based on the change in the CPI from the third quarter of 2019 through the third quarter of 2020.
Other adjustments going into effect each January will align with increases in average wages. Based on such increases, the maximum amount of earnings that can be taxed would also grow from $137,700 to $142,800.
Beneficiaries usually receive notifications by mail in December about new benefit amounts. Most who receive Social Security payments will be able to view COLA notices online with a My Social Security account.
For SS beneficiaries who also receive Medicare, new benefit amounts can’t be computed until after 20201 Medicare premium amounts are announced.