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The Social Security Administration hasannounced its 2020 cost-of-livingadjustment. Here's how the SSA estimates 2020average monthly payments will change:
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Estimated change inpayments. (Image: Social Security Administration)
The increase affects almost 69 million people, according to theSSA, and will begin for more than 63 million Social Securitybeneficiaries in January of 2020. For the more than 8 millionbeneficiaries of SSI, the increase will begin on December 31,2019.
|Beneficiaries are normally notified by mail of new benefitamounts in early December. Social Security beneficiaries whoreceive Medicare won't be able to calculate their new benefitamounts until after 2020 Medicare premium amounts areannounced.
|According to the agency, final 2020 benefit amounts will becommunicated to beneficiaries in December through the mailed COLAnotice and my SocialSecurity's Message Center.
|In addition, the maximum amount of earnings subject to theSocial Security tax (taxable maximum) will increase to$137,700.
|The earnings limit for workers who are younger than "full"retirement age (age 66 for people born in 1943 through 1954) willincrease to $18,240. For each $2 earned over $18,240, the SSA willdeduct $1 from benefits. For those turning 66 in 2020, the earningslimit will increase to $48,600. For each $3 earned over $48,600,the SSA will deduct $1 from benefits until the month the workerturns age 66.
|There is no limit on earnings for workers who are at fullretirement age or older for the entire year.
|How is the COLA calculated? It's based on "thepercentage increase in the Consumer Price Index for Urban WageEarners and Clerical Workers (CPI-W) from the third quarter of thelast year a COLA was determined to the third quarter of the currentyear," the Social Security Administration says.
|The CPI-W is determined by the Bureau of Labor Statistics in theDepartment of Labor.
|To learn more about the 2020 Social Security COLA, see theSSA's PDF on its web page.
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