MarketWatch: Why Your Social Security Will Feel Like Less
According to the Social Security Administration (SSA), Americans aged 65 and over:
- Get 33% of all income from Social Security
- 50% of married couples and 70% of unmarried persons rely on Social Security for 50% or more of their income from Social Security
- 21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income
If that’s you, you know the deal: The check’s the same each month for a whole year, but the prices, well, they just keep going up.
At the end of every year, the Social Security Trustees take these higher prices into account by raising monthly checks a few percentage points; this is called a Cost of Living Adjustment, or COLA.
But here’s some bad news for the 63 million Americans—nearly one in five—who receive Social Security benefits now: It’s possible that there won’t be much of a cost of living adjustment—if any—for 2021. Why? Because one major component of the Consumer Price Index—and thus the COLA—is fuel prices (heating oil, gasoline and so forth). These prices have plunged, thanks to the coronavirus-induced economic collapse that we’ve seen over the last few months.