Projected Social Security COLA for 2020

Trade

Well-known Member
https://seekingalpha.com/article/4285302-july-inflation-means-social-security-tips-bonds
We now have one of the three data points that will be used to calculate the above. Don't spend it yet. Anything can happen with the next two months of data. Plus the Medicare part B premium is projected to go up by $8.80 a month. Depending on the size of your social security benefit, that will eat up part or all of your increase.

Summary
Both headline and core inflation numbers came in higher than expected, indicating inflation is not 'dead' and deflation is not looming.

The July number sets a path for a 1.6% to 1.8% increase in the 2020 Social Security cost-of-living adjustment.

At this point, with two months of data remaining, the I Bond's variable rate will be higher than the current rate of 1.4%. It will be reset on November 1.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3% in July on a seasonally adjusted basis, the U.S.Bureau of Labor Statistics reported today. Over the last 12 months, "headline" inflation increased 1.8%.

Both the July increase and the year-over-year number were higher than expected. The consensus forecast was for an increase in 0.2% in July and 1.7% over the last 12 months.

Core inflation, which removes food and energy, also increased 0.3% in July and is up 2.2% over the last 12 months. The July number matched the consensus forecast, but inflation watchers had expected core inflation to come in at 2.1% year-over-year.

It's possible that these higher-than-expected inflation numbers could create a bit of turmoil in the stock and bond markets. Pre-market numbers are predicting a moderate slump in stock prices at the market's opening today.
What this means: Social Security COLA
The Social Security Administration will set next year's cost-of-living adjustment based on the average inflation index for July, August, and September, using a different index: the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

For July, CPI-W index was set at 250.236, an increase of 1.7% over the last 12 months. But this is only the first of three months of data that will set the Social Security COLA for 2020. Because the SSA uses an average of three months, at this point the COLA would be 1.6%, with two more months of data remaining.

However, based on my projections, the July index of 250.236 is actually on track to create an increase of 1.8%. But anything can happen with inflation; it's very difficult to predict. For example, a potential tariff trigger on September 1 could spur a bump in inflation in that month.
 

medicare and your social security check are no different then your pay chek and health insurance were ...except medicare is a far better deal ... an increase in one had nothing to do with the other ... in fact if you have an advantage plan the money deducted goes to the insurer
 
Another update.

https://www.investmentnews.com/arti.../2020-social-security-cola-expected-to-be-1-6
It looks like Social Security benefits will increase by about 1.6% in 2020, more than a full percentage point less than the 2.8% cost-of-living adjustment this year, according to preliminary estimates by The Senior Citizens League, a nonpartisan advocacy group representing more than 1 million retirees.

The Social Security Administration will issue its official COLA announcement for 2020 on Oct. 10 following the release of the Consumer Price Index data for September 2019. Social Security benefits increase automatically if the CPI-W, which measures price inflation for urban workers, increases in the third quarter (July, August and September) of the current year over the corresponding third quarter of the previous year.

The latest Medicare Trustees' report projects that basic Medicare Part B premiums will increase by about $8.80 a month to $144.30 per month in 2020. The official announcement about Medicare premiums for 2020 will be issued in the fall. High-income retirees pay more for the same Medicare coverage.
 
https://www.fool.com/retirement/2019/10/10/social-securitys-2020-cola-is-revealed-heres-what.aspx
The big day has finally arrived!

Given that Social Security is our country's most successful social program, and that 62% of retired workers are netting at least half of their income from their Social Security benefit, all eyes were on Oct. 10. That's because Oct. 10 is the release date for the U.S. Bureau of Labor Statistics' (BLS) September inflation data, which contains the last puzzle piece needed to calculate Social Security's cost-of-living adjustment (COLA) for 2020.

In simple terms, COLA is the "raise" that beneficiaries receive from one year to the next that takes into account the inflation they've faced. Of course, it's not a raise in the truest sense of the word, because COLA is only designed to keep up with inflation, not outpace it.

Earlier this morning, the BLS reported September's inflation data, allowing for the concrete announcement that Social Security's COLA in 2020 will be rising by 1.6%.
 
https://www.cnbc.com/2019/10/10/social-security-cola-will-be-1point6percent-in-2020.html
The next announcement for retirees to watch for is Medicare Part B premiums for next year.

Estimates from Medicare trustees peg that at $144.30, up from $135.50 in 2019.

If those estimates are correct, individuals who receive the lowest Social Security benefit amounts -- $550 or less – might not see bigger Social Security checks, according to the Senior Citizens League.

Medicare Part B premiums (which cover doctor’s visits among other things) are typically automatically deducted from Social Security benefit checks.
 

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