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The cost of living adjustment (COLA) will increase Social Security benefits by 1.6 percent in 2020, an average of about $24 per month for individuals, the Social Security Administration announced Wednesday.
The increase for 2020 is notably less than the 2.8 percent bump received this year, but higher than the average over the past decade (1.4 percent).
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The COLA will boost the average Social Security retirement benefit for a single person by $288 per year. The average retirement check is expected to be $1,479 in December 2019 before the COLA raises the benefit to $1,503 a month later, according to the administration.
"Social Security is the largest source of retirement income for most retirees, so today's announcement of a 1.6 percent COLA increase, while modest, will help Social Security beneficiaries and their families as they try to keep up with rising prices,” AARP Chief Executive Officer Jo Ann Jenkins says. “Social Security's annual COLA amount typically does not keep pace with all the increases in living expenses that most seniors face, including the costs of housing, food, transportation and, especially, health care and prescription drugs. AARP's recent Rx Price Watch report found that retail drug prices increased by twice the rate of inflation during 2017, and have exceeded the inflation rate for at least 12 consecutive years.”
The monthly premium for Medicare Part B recipients is expected to be announced soon. This premium could affect individual Social Security benefits because it is deducted directly from benefit payments. Part B Medicare covers physician and diagnostic services, outpatient hospital services, certain home health services and durable medical equipment.