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Cost-of-Living Adjustment (COLA) Information for 2020

Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will increase 1.6 percent in 2020.

Cost-of-Living Adjustment (COLA) Information for 2020

 
Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will increase 1.6 percent in 2020.

The 1.6 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 63 million Social Security beneficiaries in January 2020. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2019. (Note: some people receive both Social Security and SSI benefits)

Read more about the Social Security Cost-of-Living adjustment for 2020.

The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $137,700.

The earnings limit for workers who are younger than "full" retirement age (age 66 for people born in 1943 through 1954) will increase to $18,240. (We deduct $1 from benefits for each $2 earned over $18,240.)

The earnings limit for people turning 66 in 2020 will increase to $48,600. (We deduct $1 from benefits for each $3 earned over $48,600 until the month the worker turns age 66.)

There is no limit on earnings for workers who are "full" retirement age or older for the entire year.

Read more about the COLA, tax, benefit and earning amounts for 2020.

Medicare Information
Information about Medicare changes for 2020, when announced, will be available at www.medicare.gov. For Social Security beneficiaries receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2020 are announced. Final 2020 benefit amounts will be communicated to beneficiaries in December through the mailed COLA notice and my Social Security's Message Center.

Your COLA Notice
In December 2019, Social Security COLA notices will be available online to most beneficiaries in the Message Center of their my Social Security.

This is a secure, convenient way to receive COLA notices online and save the message for later. You can also opt out of receiving notices by mail that are available online. Be sure to choose your preferred way to receive courtesy notifications so you won't miss your secure, convenient online COLA notice.

Remember, our services are free of charge. No government agency or reputable company will solicit your personal information or request advanced fees for services in the form of wire transfers or gift cards. Avoid falling victim to fraudulent calls and internet “phishing” schemes by not revealing personal information, selecting malicious links, or opening malicious attachments. You can learn more about the ways we protect your personal information and my Social Security account here.

History of Automatic Cost-Of-Living Adjustments (COLA)
The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.

The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor. By law, it is the official measure used by the Social Security Administration to calculate COLAs.

Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation.

Beginning in 1975, Social Security started automatic annual cost-of-living allowances. The change was enacted by legislation that ties COLAs to the annual increase in the Consumer Price Index (CPI-W).

The change means that inflation no longer drains value from Social Security benefits.
&‹The 1975-82 COLAs were effective with Social Security benefits payable for June (received by beneficiaries in July) in each of those years. After 1982, COLAs have been effective with benefits payable for December (received by beneficiaries in January).

Automatic Cost-Of-Living Adjustments received since 1975
July 1975 -- 8.0% January 1999 -- 1.3%
July 1976 -- 6.4% January 2000 -- 2.5% (1)
July 1977 -- 5.9% January 2001 -- 3.5%
July 1978 -- 6.5% January 2002 -- 2.6%
July 1979 -- 9.9% January 2003 -- 1.4%
July 1980 -- 14.3% January 2004 -- 2.1%
July 1981 -- 11.2% January 2005 -- 2.7%
July 1982 -- 7.4% January 2006 -- 4.1%
January 1984 -- 3.5% January 2007 -- 3.3%
January 1985 -- 3.5% January 2008 -- 2.3%
January 1986 -- 3.1% January 2009 -- 5.8%
January 1987 -- 1.3% January 2010 -- 0.0%
January 1988 -- 4.2% January 2011 -- 0.0%
January 1989 -- 4.0% January 2012 -- 3.6%
January 1990 -- 4.7% January 2013 -- 1.7%
January 1991 -- 5.4% January 2014 -- 1.5% 
January 1992 -- 3.7% January 2015 -- 1.7%
January 1993 -- 3.0%  January 2016 -- 0.0%
January 1994 -- 2.6% January 2017 -- 0.3% 
January 1995 -- 2.8% January 2018 -- 2.0%
January 1996 -- 2.6% January 2019 -- 2.8%
January 1997 -- 2.9% January 2020 -- 1.6%
January 1998 -- 2.1%  

(1) The COLA for December 1999 was originally determined as 2.4 percent based on CPIs published by the Bureau of Labor Statistics. Pursuant to Public Law 106-554, however, this COLA is effectively now 2.5 percent.

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