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What Is the Social Security COLA for 2021?

April 24, 2020

From the Kiplinger website

The Kiplinger Letter is forecasting that the 2021 Social Security cost-of-living adjustment will be below 1%. The COLA, which will be officially set in October 2020, is down from the 1.6% COLA increase retirees and other beneficiaries received at the start of 2020. That was itself a drop from 2019, when the COLA increase was 2.8%.

The Social Security Administration (SSA) is required by law to prevent inflation from eroding the buying power of the benefits paid out to nearly 69 million Americans. It uses a Social Security COLA formula based on the consumer price index to adjust payouts every January. Since prices typically rise, payouts typically rise also. If prices ever fell, payouts would stay unchanged until prices catch back up again.

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