| Social Security cost-of-living adjustment will be 1.3% in 2021 | | |  | WED, OCT 14, 2020 | | | | Next year will bring a modest rise in Social Security checks for older Americans, many of whom are already struggling financially with the effects of the coronavirus pandemic.
The 69 million people – including retirees, disabled people and others – who rely on Social Security will receive a 1.3% cost-of-living adjustment to their monthly checks in 2021. Increases have been modest for years because of persistently low inflation. The 1.3% COLA is smaller than the 1.6% bump to benefits retirees and other beneficiaries saw in 2020. In 2019, they received a 2.8% boost to their monthly checks.
To break it down: A retirees' estimated average monthly benefit next year will increase by $20 per month, to $1,543 from $1,523, after the 1.3% increase.
The COLA affects the personal finances of about 1 in 5 Americans, including Social Security recipients, disabled veterans and federal retirees. The economic fallout from the virus has reduced tax collections for Social Security and Medicare, likely worsening their long-term financial condition. But there's been no real discussion of either program between President Donald Trump and Democrat Joe Biden.
"This is more evidence that our system to adjust benefits, for inflation, is broken," said Mary Johnson, Social Security policy analyst for advocacy group The Senior Citizens League, in a prepared statement. "We are looking at a period where there are growing inadequacies in Social Security benefits, particularly for people with lower-to-middle benefits."
The 1.3% COLA is the smallest since 2017 and slightly below the 1.4% average over the past decade, a period of unusually low inflation, according to The Senior Citizens League. And it would be less than half the 3% average bump in the previous decade. This year's increase of 1.6% boosted the average retiree's monthly check by $23.40.
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