A 2.8% increase in benefits will be available for the more than 67 million Social Security and Supplemental Security Income recipients next year, the largest increase since 2011, though still small by historical standards.
The annual increase is determined by taking the average rate of inflation – determined by the Bureau of Labor Statistics’ broad measure of prices for food, housing, clothing, transportation, energy, medical care, recreation and education – from the third quarter of one year to the next. With lower inflation since the Great Recession, adjustments have been slight or nonexistent. The 2.8% gain translates into an approximate $39-a-month increase for all retired workers, from $1,422 to $1,461.
Estimated Average Monthly Social Security Benefits Payable in January 20191
|Before 2% COLA||After 2% COLA|
|All retired workers||$1,422||$1,461|
|Aged couple, both receiving benefits||$2,381||$2,448|
|Widowed mother and two children||$2,797||$2,876|
|Aged widow(er) alone||$1,348||$1,386|
|Disabled worker, spouse and one or more children||$2,072||$2,130|
|All disabled workers||$1,200||$1,234|
For those who are still working, the government also announced it will increase the maximum amount of earnings subject to the Social Security tax to $132,900 from $128,400, starting in January.
1 Social Security Administration Fact Sheet – 2019 Social Security Changes, Retrieved Oct. 11, 2018.
This information is provided for informational and educational purposes only. Waddell & Reed believes the information has been obtained from sources considered to be reliable, but does not guarantee the accuracy of the information provided. This information is not meant to be a complete summary or statement of all available data necessary for making financial or investment decisions and does not constitute a recommendation.
Please note that the information provided may include references to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to you to assist in understanding the issues discussed. Neither Waddell & Reed, Inc., nor its Financial Advisors give tax, legal, or accounting advice.
This information is not meant as financial or investment advice pertaining to your personal situation. The selection of appropriate investment, insurance or planning options and/or strategies should be made on an individual basis after consultation with appropriate legal, tax and financial advisors. Nothing contained herein is intended as a solicitation or an offer to buy or sell any product or service mentioned and they may not be suitable for all investors.
Securities offered through Waddell & Reed, Inc., Member FINRA/SIPC, are not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, are not guaranteed by the financial institution, and are subject to risks, including the possible loss of principal. Insurance products are offered through insurance companies with which Waddell & Reed has sales arrangements. Guarantees provided by insurance products are subject to the claims-paying-ability of the issuing insurance company.