2021 COLA Watch: Still looks like 1.3%
Although it won’t be official for a few more weeks, the rumor mill appears to be circling consistently around a 1.3% cost-of-living adjustment for Social Security recipients in 2021. CBS MoneyWatch’s Aimee Picchi, in a post on everythinglubbock.com, reports on the Senior Citizens League comments that this adjustment “ … would be among the stingiest hikes in government retirement benefits, which have lost nearly a third of their buying power since 2000.”
A steep decline in gasoline prices, triggered in part by the COVID-19 change in driving habits, is attributed to be one of the main factors limiting consumer price index growth. As pointed out in Ms. Picchi’s article (which you can access here), the continued rise in health care costs and Medicare premiums, when coupled with the loss of buying power faced by seniors, creates considerable financial pressure for most beneficiaries.
As most Social Security beneficiaries are aware, a 1.3% COLA would be one of the lowest on record, and well lower than the historical average of between 3% and 4% since COLAs began in 1975. With the future of Social Security’s benefit levels continuing to look cloudy in the face of the program’s long-term solvency issue, succeeding years’ adjustments are anybody’s guess. On this matter, one of the Association of Mature American Citizens’ (AMAC) Social Security reform recommendations is a provision that would guarantee an annual cost-of-living adjustment for all. It’s part of AMAC’s “Social Security Guarantee,” which you can review here…
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