Some 68 million Social Security beneficiaries will receive a 1.6% increase in their monthly check starting in 2020. That means the average Social Security beneficiary will see their benefit increase by just $23.40 a month to $1,460.
What’s more, some of the increase will be used to offset the rising cost of Medicare.
The government typically deducts Medicare Part B premiums from a beneficiary’s Social Security check. Those premiums are expected to rise around $8.80 a month to $144.30 in 2020 for about 70% of Medicare beneficiaries.
Implemented back in the 1970s, automatic COLAs (cost of living allowances) are designed to help seniors maintain their buying power when inflation causes the cost of goods and services to rise.
But don’t be confused by the word “automatic” — COLAs vary from year to year, and they’re based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
Historically, COLAs have been as high as 14.3%, though in recent years, we haven’t seen numbers anywhere close.