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Social Security benefits will rise 1.6 percent in 2020

Written by

Diane Archer

in

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As a result of inflation, people on fixed incomes watch their incomes decline in value over time. Fortunately, Social Security’s benefits are adjusted every year automatically to offset increases in inflation. Its modest, but vital, benefits do not erode over time. In 2020, Social Security benefits will rise 1.6 percent. This adjustment is not an increase in benefits. It simply allows people to tread water, to help people maintain their purchasing power.

Unfortunately, the government’s cost of living adjustment for Social Security is based on inflation experienced by workers and not by retirees and people with disabilities who are unable to work. Older people and people with disabilities have, on average, higher health care costs; those costs tend to rise considerably faster than overall inflation. For that and other reasons, people receiving Social Security generally experience higher cost of living increases than workers, and Social Security adjustments are inappropriately low. Even with the adjustments, Social Security benefits have less value from one year to the next. Nevertheless, inadequate adjustments are better than none.

In 2020, people on Social Security will receive an average cost of living adjustment or COLA of $24 a month or $288 a year. Some of this increase, about $8.80 a month, will go to covering the increase in their standard Medicare Part B premium. The 2020 standard Part B premium is projected to increase from $135.50 to around $144.30 a month.

Social Security benefits, which are modest, but vital, should be increased, as US Representative John Larson, Senator Elizabeth Warren and Senator Bernie Sanders have all proposed. And, Congress should enact a better, more accurate measure of inflation for people receiving Social Security benefits. After a lifetime of work, Americans should have enough guaranteed Social Security income to maintain their standards of living.

Congress also should improve Medicare by expanding it to cover such vital services as hearing aids, dental work, and vision care. Premiums, copays, and deductibles should be eliminated. And everyone should be covered. Medicare for All will improve the nation’s health outcomes, while costing far less than what we spend today.

It is long past time to enact a more accurate cost of living adjustment for Social Security, expand its benefits, improve Medicare, and extend it to everyone.  That is profoundly wise policy. It also represents the views of the vast majority of us.

If you want Congress to expand Social Security, please sign this petition.

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Comments

2 responses to “Social Security benefits will rise 1.6 percent in 2020”

  1. BC Shelby Avatar
    BC Shelby

    Yes the formula needs to be revised, not only because of medication and costs not covered by Medicare parts A & B, but housing, particularly rental housing, which since the recession has skyrocketed out of control in many cities where senior and the disabled live. Coupled with an acute shortage of low income/affordable rental housing (in some cases with wait lists measured in years and Section 8 funding very limited) many are paying half if not more than their monthly benefit just to keep a roof over their heads.

    Utilities are another cost which can be a big expense. For example most commercial phone plans are based on multiple lines so those who only need a single line pay far more for that service compared to an individual on a family plan that offers deep discounts for 4 lines. Net access, which today has become an important part of everyday life, is often bundled with other services and with the consolidation of the cable/wireless industry, there is less competition which tends to keep prices high. (in many other nations Net access, even high speed, is considered a service and priced at a fraction of what it costs here and in some cases, is even free.

    Food is another expense that keeps going up, particularly “healthy” foods that are natural/organic rather than cheaper over-processed ones with unhealthy/artificial ingredients, along with meats and poultry raised in warehouse facilities that are loaded with growth hormones and antibiotics or produce sprayed with toxic chemical herbicides and pesticides. With recent cuts to the SNAP/EBT programme the benefit level can be ridiculous. If you receive an income of 1,100$ or more a month (whether working, SS, or pension) you maybe get 12$ – 16$ a month. That doesn’t even cover a week’s worth of groceries at a mainstream supermart. I have seen my EBT benefits plummet by over 45% since 2017 while my SS benefit only went up a paltry .3% in 2018 and 2.8% for this year, neither increase which offsets the reduction in EBT benefits. Add in paying half (or more) of your benefit for rent along with utilities and transportation, and it can get pretty dire.

    Some will point out that SS was originally intended to be only part of one’s retirement, supplemented by pensions and savings. Well pensions have almost become extinct, and saving isn’t what it used to be before the demise of the S&Ls in the 1980s when you received interest that outpaced rather than lagged behind inflation. With decades of wage stagnation and a majority of workers in the low paying jobs, it is also difficult for many to have anything left over to put into retirement savings. Many people today are holding down more than one job just to make it month to month while still having to make sacrifices and juggle bills. 401k’s are a joke as not only are they tied to the volatile stock market but if you take anything out after retiring, you have to to pay income taxes on it.

    Many people also lost their savings /orand cashed out what retirement they had during the last recession just to survive. Meanwhile they are being stuck with primarily low wage occupations, a growing number of which today are part time, gig, and contract based which offer zero benefits (including health coverage) and no retirement.

    Given the situation today compared to 70 years ago, a majority of retirees, such as myself, find all we have left to live on is Social Security. 1%, 2%, even3% isn’t enough to keep pace with today’s living costs, particularly the ones I singled out, when that is your only source of income. For example the 2.8% increase I received for this year went directly to a rent increase (and I’m living in what is classified as “low income housing”) so for myself it was basically another “zero year” like 2017. Were it not for the fact I qualified for my state’s Medicare Savings Plan, which covers the monthly Part B Premium, my rent would be nearly 60% of my monthly benefit and I’d be in a serious situation, possibly facing being out on the street.

    Reply
  2. Darry Carlstone Avatar
    Darry Carlstone

    I tried to sign the statement about Social Security, but my (old) system will not allow it to move forward. If possible, please accept my approval here.

    D.S. Carlstone

    Reply

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