Expect a very low Social Security cost of living adjustment in 2020
Social Security’s cost-of-living adjustment (COLA) will be announced in mid-October, but projections are for only a 1.6% COLA for 2020, down from 2.8% in 2019. A 1.6% adjustment would equate to an added $23 per month for someone receiving the average retirement benefit of $1,460. COLAs have been averaging 1.4% over the last decade, half of the average 3% it was from 2000 and 2009. Alessandra Malito explains in this MarketWatch piece how Social Security bases its adjustment on a measure known as the CPI-W, the consumer-price index and buying patterns of younger workers. But younger workers and seniors have different spending patterns. Read the full article here.
The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized by making modest changes in cost of living adjustments (including a tiered COLA system) and the retirement age, with no additional taxes on workers. AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas. One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement. This component is intended to appeal especially to younger workers. AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years. Read AMAC’s plan here.