An inflation rate of less than 2% may be good news for shoppers, but it’s worrisome for seniors who rely on Social Security for a large part of their retirement income.
The Senior Citizens League, an advocacy group, projects that the annual cost-of-living adjustment for benefits in 2020 will be 1.7%, or about $24 a month for the average monthly payout of $1,420.
The League’s projections are based on the Consumer Price Index through April, says Mary Johnson, the organization’s Social Security and Medicare policy analyst. The COLA could increase if higher tariffs on Chinese imports or a spike in gas prices drive up inflation in the third quarter. Social Security will announce the official increase for 2020 in October.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Some lawmakers and advocates for seniors want to tie the COLA to a “seniors” index that gives more weight to the cost of health care. One roadblock in the way of that change is Social Security’s precarious financial condition. Social Security trustees project that its costs will exceed its income next year. That means the program will need to dip into its nearly $3 trillion trust fund. If Congress doesn’t act to shore up the fund, it will be depleted by 2035, forcing Social Security to reduce benefits to about 80%—and eventually 75%—of promised benefits.
-
Super Micro Computer: Why This Hot Stock Could Hit $1,500Super Micro Computer's long-term AI revenue potential is underappreciated, Loop Capital says. Here's what you need to know.
-
Instant EV Tax Rebates Are a Hit: $580M Paid This YearEV Credits Claiming federal electric vehicle tax credits at the point of sale is a new and popular option in 2024.
-
403(b) Contribution Limits for 2024retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
-
SEP IRA Contribution Limits for 2024SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
-
Roth IRA Contribution Limits for 2024Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
-
SIMPLE IRA Contribution Limits for 2024simple IRA The maximum amount workers at small businesses can contribute to a SIMPLE IRA increased by $500 for 2024.
-
457 Contribution Limits for 2024retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2024retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
-
Is a Medicare Advantage Plan Right for You?Medicare Advantage plans can provide additional benefits beneficiaries can't get through original Medicare for no or a low monthly premium. But there are downsides to this insurance too.
-
What You Must Know About the Different Parts of MedicareMedicare Medicare can be complicated but we've got you covered. Here is a quick guide to the different benefits provided through each part.
