What you should know about the most recent cost-of-living adjustment.

On October 13, 2020, the Social Security Administration (SSA) officially announced that Social Security recipients will receive a 1.3 percent cost-of-living adjustment (COLA) for 2021. This adjustment will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Additionally, increased payments to more than 8 million Supplemental Security Income (SSI) beneficiaries will begin on December 31, 2020.¹

Is this a COLA lite?

Many may be disappointed by this modest bump compared to the 1.6 percent increase beneficiaries saw in 2020 or the 2.8 percent boost in 2019. However, it’s important to remember that the Social Security Act ties the annual COLA to the increase in the Consumer Price Index (CPI). In broad terms, the CPI measures the price of consumer goods and how they're trending in to evaluate the economy. In short, lower inflation numbers usually equals a modest COLA.²

How You Will Be Notified.

According to the Social Security Administration, Social Security and SSI beneficiaries are usually notified by mail starting in early December about their new benefit amount. However, if you’ve set up your SSA online account, you will also be able to view your COLA notice online through your “My Social Security” account.³

What are your next steps?

If this increase surprises or concerns you, it's always a good idea to seek guidance from your financial professional about changes to any of your sources of retirement income.

Rich Ramsay may be reached at 651-429-3151 or rich@ramsaywealth.com.

https://www.ramsaywealth.com/

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through JW Cole Financial, Inc. (JWC) Member FINRA/SIPC. Advisory services offered through JW Cole Advisors, Inc. (JWCA). Ramsay Wealth Management and JWC/JWCA are unaffiliated entities.

Citations.
1. SSA.gov, October 13, 2020
2. SSA.gov, October 13, 2020
3. SSA.gov, October 13, 2020