2021 COLA: A Raise Likely for Social Security Recipients After All
Relax, looks like an increase is coming for 2021 Social Security checks. Inflation has been on a roller coaster in 2020. Summer rebounds in those commodities, as well as increases for in-demand items like used cars, meat and haircuts, have put the consumer price index back on a more normal trajectory, one that will likely mean an increase in the Cost of Living Adjustment for 2021. The Kiplinger Letter is now forecasting a 1.2% increase in the 2021 COLA, which should be welcome news to retirees and others who receive Social Security benefits.
The Social Security Administration 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.
Note that the Social Security Administration ties its adjustment for
Social Security benefits to the wage earners’ consumer price index, which is similar to, but not exactly the same as, the urban dwellers’ consumer price index . In the second case of negative inflation, there was no January 2016 COLA following a -0.4% inflation rate, and the January 2017 COLA fell from 0.7% to 0.3%. continue reading HERE...