Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will increase 1.6 percent in 2020, the Social Security Administration announced last week.
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). The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.
Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $137,700 from $132,900.
Social Security and SSI beneficiaries are normally notified by mail in early December about their new benefit amount. Most people who receive Social Security payments will be able to view their COLA notice online through their my Social Security account.
Social Security is the major source of income for most of the elderly.
- Nearly nine out of ten individuals age 65 and older receive Social Security benefits.
- Social Security benefits represent about 33% of the income of the elderly.
- Among elderly Social Security beneficiaries, 50% of married couples and 70% of
unmarried persons receive 50% or more of their income from Social Security.
- Among elderly Social Security beneficiaries, 21% of married couples and about 45% of
unmarried persons rely on Social Security for 90% or more of their income.
In 1940, the life expectancy of a 65-year-old was almost 14 years; today it is just over 20
years. By 2035, the number of Americans 65 and older will increase from approximately 56
million today to over 78 million. There are currently 2.8 workers for each Social Security beneficiary. By 2035, there will be 2.3 covered workers for each beneficiary.