Social Security recipients will get a modest 1.3% cost-of living-increase in 2021, but that might be small comfort amid worries about the coronavirus and its consequences for older people.
The increase amounts to $20 a month for the average retired worker according to estimates released Tuesday by the Social Security Administration. That would follow a 1.6% increase this year in the cost-of-living adjustment, or COLA.
The COLA affects the personal finances of about 1 in 5 Americans, including Social Security recipients, disabled veterans and federal retirees, all in all some 70 million people.
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 in the personally charged election contest between President Donald Trump and Democrat Joe Biden.
“It's very difficult to talk about anything policy-wise,” said Mary Johnson, an analyst with the nonpartisan Senior Citizens League. “We are looking at a period where there are growing inadequacies in Social Security benefits, particularly for people with lower-to-middle benefits.”
With the just-announced COLA, the estimated average monthly Social Security payment for a retired worker will be $1,543 a month next year. The program's automatic inflation increases are fairly unique, since most private pensions do not offer similar adjustments.