In the world of Social Security retirement benefits, it's hard to know what to expect. Every year about this time, it seems like we start to hear about the possibility of Cost of Living Adjustments (COLAs) for the next year. Here are a few interesting details about how it all works:
The Social Security Administration (SSA) is required by law to prevent inflation from eroding the buying power of the benefits they pay. They have a formula that they use to calculate the COLA each year. It's based on the consumer price index, specifically measuring the third quarter of the year (July-Aug-Sept) against the third quarter of the prior year.
If you've been wondering what the consumer price index looks like for 2020, check out this link.
This year, the 2021 COLA will be announced October 13. And just in case you're interested, here are the COLAs back to 2009:
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%
If you're concerned about keeping up with inflation, there are some financial strategies that may make sense. Check out our events, or call our office to speak to one of our financial specialists!
For more information, check out this article from Kiplinger Finance.