Changes in COLA for SSI in 2020
Roughly 10,000 baby boomers reach retirement age each day, which is above the U.S. average. If you are retired or you’re counting the days when you leave your full-time job, Social Security should be your biggest concern. It’s a fundamental part of your retirement income. As a result, it’s important to stay up to date on the COLA for the year 2020. However, before we dive into details, let’s find out what COLA entails.
What is COLA?
The Cost-of-Living Adjustment is government legislation that began in 1973. Its function is to control the Social Security and Supplemental Security Income (SSI) benefits increases. It also aims to keep pace with inflation. Typically, whenever there is an increase in the Consumer Price Index (CPI), the cost of living will go up as well. Additionally, it also means that the prices of goods and services will be a little higher. COLA for SSI comes to the rescue by offsetting some of these escalating costs.
The cost of living has steadily increased throughout the years. As a result, it has led to a rise in the federal benefit rates. Notably, there has also been a steady increase in the COLA for SSI benefits. And 2020 is no different — 69 million Americans will look forward to a 1.6 percent increase on their SSI benefits. The cost-of-living adjustment (COLA) will begin in January 2020.
What is the Retirement Age?
In 1983, Congress passed amendments that phased in a gradual increase in the age for collecting full Social Security retirement benefits. The retirement age is increasing from 65 to 67. Are you nearing your retirement age? Click here to find out what SSA says your full retirement age is.
Your Social Security Benefits Will Be Taxed if . . .
Depending on your income level, about 50% of your benefits will be taxed. Those liable for taxation include individuals with an income between $25,000 to $34,000 and $32,000 to $44,000 for married couples.
However, for individuals with an income of more than $34,000 or married couples with $44,000 or more, 85% of their Social Security Benefits will be taxed.
Maximum Benefits Will Increase
If your income scale is $132,900 or more, your maximum benefits will increase in 2020. Although it is possible to take home $2,000 per month as retirement benefits, if you delay your Social Security until you are 70, you can get up to $3,700 per month. If you wait until you are 70 years old, you will increase your benefits by 32%.
Benefits of Retirement
Whatever your age, it’s important to understand your benefits after retirement. For this reason, it is imperative to visit the official Social Security website to begin making your retirement plans. Indeed, there is a myriad of benefits to be enjoyed based on the latest updates on COLA for SSI.