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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
-
New $6,000 'Senior Bonus' Deduction: What It Means for Taxpayers Over Age 65Tax Changes If you’re an older adult, a new bonus tax deduction could provide a valuable tax benefit. Here's how it works.
-
Walmart Plus Members Will Soon Have Their Choice Between Two Streaming ServicesDiscover which streaming service is coming to the platform.
-
457 Plan Contribution Limits for 2025Retirement plans There are higher 457 plan contribution limits for state and local government workers in 2025. That's good news for state and local government employees.
-
Medicare Basics: 12 Things You Need to KnowMedicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
-
The Seven Worst Assets to Leave Your Kids or Grandkidsinheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
-
SEP IRA Contribution Limits for 2025SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $70,000 in 2025, up from $69,000 in 2024.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRAs allow you to fund your retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2025 limits and income-based phaseouts.
-
SIMPLE IRA Contribution Limits for 2025simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
-
Roth 401(k) Contribution Limits for 2025retirement plans The Roth 401(k) contribution limit for 2025 increased, and workers who are 50 and older can save even more.
