However, one of the biggest proposed changes could come if President-elect Joe Biden‘s stimulus plan, which proposes adding an extra $200 to millions of monthly Social Security payments, is approved. Even among seniors who spend more time in their cars, fuel costs tend to pale in comparison to what they're forced to spend year after year just to keep up with their health. This move would be devastating for Social Security. Additionally, older Americans are at a greater risk of needing medical care for the Coronavirus, and treatment is estimated to cost between $60,000-$80,000. COLAs are instead determined based on annual third-quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). So please vote. Social Security benefits will get a 1.3% cost-of-living adjustment in 2021. Here's Why Buying Power Isn't Seniors will inevitably get robbed in the coming year, despite a modest boost to their monthly benefits. Many estimated that the Social Security COLA for 2021 would have been as low as zero, so this adjustment could be considered a win. For comparison, the average Social Security benefit was just $1,461, per month, in 2019, so this increase would likely benefit a large number of retirees. The average Social Security COLA was around 3% between 2000 and 2009. All Rights Reserved, This is a BETA experience. Trump has stated that if he is reelected, he would forgive the deferral, and he has expressed a desire to eliminate the payroll tax permanently. For the 64 million Americans who get Social Security, this would lift the average monthly benefit—which is $1,503 this year—to $1,522. Though monthly Social Security checks will rise modestly in 2021, there's a good chance that healthcare costs will rise even more. In … We saw a zero cost-of-living adjustment for Social Security in 2010, 2011, and 2016. Unfortunately, this isn't a situation unique to 2021. More Social Security Taxes Coming in 2021? Jordans And Yeezys Have Reached Official Investment Class Status, 5 Steps To Tax-Free Student Loan Cancellation, This International Women’s Day Lauren Simmons, The NYSE’s Youngest Female Trader, Says ‘No’ To Limits. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Trump Promises Could Bankrupt the Social Security Trust Fund. When the coronavirus pandemic hit earlier this year, many analysts worried that decreasing gas prices meant that seniors would get no Social Security raise going into 2021. Senior advocates have long recommended switching over to the Consumer Price Index for the Elderly (CPI-E) to determine COLAs -- a more targeted index that can properly account for healthcare inflation. Tax cap goes higher. Biden accepted the Democratic nomination to challenge President Donald Trump, urging Americans in a prime-time address to vote for new national leadership that will overcome deep U.S. political divisions. protective masks while waving outside the Chase Center during the Democratic National Convention in Wilmington, Delaware, U.S., on Thursday, Aug. 20, 2020. Looks like there is positive news about Social Security coming your way. In fact, Social Security beneficiaries have lost a whopping 30% of their buying power since the year 2000, with much of that directly tied to healthcare costs. It was previously estimated that the Social Security trust fund would run out of money around 2034. The Kiplinger Letter is forecasting that the 2021 Social Security cost-of-living adjustment will be below 1%. In 2021, Social Security retirees are getting a cost-of-living adjustment (COLA), better known as a Social Security raise.