Each year, the Social Security Administration announces the annual cost-of-living adjustment (COLA). By law, federal benefits increase when the cost of living rises, as measured by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers. Usually, there is an increase in the benefit amount people will receive each month, starting the following January.
Nearly 69 million Americans will see a 1.6 percent increase in their Social Security benefits and SSI payments in 2020.
Other changes that will happen this month reflect the increase in the national average wage index. For example, the maximum amount of earnings subject to Social Security payroll tax will increase to $137,700 from $132,900. The earnings limit for workers who are younger than “full” retirement age (age 66 for people born in 1943 through 1954) will increase to $18,240. (We deduct $1 from benefits for each $2 earned over $18,240.)
The earnings limit for people turning 66 in 2020 will increase to $48,600. (We deduct $1 from benefits for each $3 earned over $48,600 until the month the worker turns age 66.)
What does that mean for you? Whether you already receive Social Security benefits and want information about your new benefit amount or you are curious about how much you may receive in the future, sign up for and log in to your mySocialSecurity account today at www.socialsecurity.gov/myaccount. You can choose to receive an electronic notification by e-mail, text, or both ways under “Message Center Preferences.” The notification will let you know that a new message is waiting for you. The Social Security Administration will not send any personal information in the notification.
The Message Center also allows you to go paperless by opting out of receiving agency notices by mail that you can get online, including annual cost-of-living adjustments and the income-related monthly adjustment amount increases. The Message Center is a secure portal where you can conveniently receive sensitive communications that we don’t send through email or text.
More information about the 2020 Social Security COLA is available at www.socialsecurity.gov/cola.
Contributor Kirk Larson is a public affairs specialist at Social Security Washington.