[Barron’s] Seniors and other Americans who get Social Security benefits won’t notice much of a difference in their monthly checks next year as the annual cost-of-living adjustment will be the smallest since 2017.
The Social Security Administration on Tuesday announced a 1.3% cost-of-living adjustment, or COLA, for 2021. For the average retiree, that translates to about $20 more a month, to $1,543. Last year’s COLA of 1.6% gave the average retiree $24 more each month.
The purpose of the annual adjustment is to protect the buying power of Social Security benefits from inflation. It’s tied to the increase in the consumer-price index as determined by the Labor Department’s Bureau of Labor Statistics.
According to research from the Senior Citizens League, Social Security benefits have lost 30% of their purchasing power since 2000, mostly because of low COLAs and rising health-care costs. COLAs averaged 3% from 1999 to 2009 but averaged only 1.4% from 2010-20, according to the group. There were no COLAs in 2010, 2011, and 2016.
Read more: Barron’s »