Broker Check

Social Security Benefits Set To Grow 2.8% Next Year

October 24, 2018

In 2019, seniors collecting Social Security will get their biggest “raise” since 2012.

Benefits are of course keeping up with the rise of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) that the federal government uses as a guide for cost-of-living adjustments (COLAs). This 2019 adjustment follows a 2.0% boost in 2018. The last time benefits increased 2% or more in consecutive years was 2008-09.

Will this COLA be effectively eaten up by higher Medicare premiums? The non-partisan Senior Citizens League (which correctly predicted the amount of the 2019 benefits enlargement) thinks that will not be as common in 2019 as it was in 2018. Most of the approximately 5 million retirees with monthly benefits ranging from $600-634 could see their Medicare Part B premium consume their whole 2019 COLA, according to the SCL’s projections. In many retiree households, much of the 2019 benefits boost may go toward paying out-of-pocket medical expenses, higher Part B premiums, or both; the SCL notes that for about 30% of retirees, those two costs are absorbing 33-50% of Social Security benefits.2