Employees planning for retirement or those who can’t work due to a disability will oftentimes claim Social Security benefits to help with the cost of living. Beneficiaries receive monies each month, which is calculated by their earnings from paying Social Security taxes, to help cover rent, groceries, medical bills and more.
Disabled and retired Americans are relying more and more on Social Security benefits to help them get by, especially with the COVID-19 pandemic affecting the health and finances of millions.
In October 2020, the Social Security Administration (SSA) announced beneficiaries would be receiving a 1.3 percent increase in 2021, a much-needed decision for those who rely on those benefits.
Our team at WPMH Legal wants to answer your questions regarding this change.
How much will I receive?
This small boost will amount to around $20 every month for each person receiving retirement and disabilities benefits from social security. While this is modest at best, it’s “needed to help Social Security beneficiaries and their families try to keep up with rising costs,” says AARP Chief Executive Officer Jo Ann Jenkins.
“Social Security is arguably the most important and successful program in our nation’s history, providing vital benefits that individuals earn through a lifetime of hard work and contributions to the system,” Jenkins says. “It is the largest source of retirement income for most Americans and provides nearly all income (90 percent or more) for 1 in 4 seniors.”
How’s this number calculated?
Calculating the cost-of-living adjustment (COLA) comes from looking at the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The index numbers for July, August and September from the previous year are compared to the numbers for the same months in the current year.
This year, the third-quarter numbers from 2019 were compared to 2020’s and the percentage change between them becomes the COLA for the following year, starting in January. If there’s no change, or if there’s a decline in the CPI-W, there’s no increase in Social Security benefits.
Is this the average increase?
Some years there are no increases in benefits. The biggest increase since Social Security became a government program was in 1981 at 14.3 percent.
But because of the coronavirus pandemic, the increase this year comes as a bit of a surprise. With many disabled and retired Americans struggling to stay afloat, and payroll taxes decreasing because of high employment rates, the Social Security trustees estimate that the retirement fund for Americans will run out by 2035 if this continues.
According to the SSA, almost 50 million retired workers and their dependents are receiving benefits. In addition, there are nearly 10 million disabled Americans also receiving benefits. Eighty-nine percent of workers are covered by Social Security in the event of a severe and prolonged disability.
Who can you turn to?
If you’re disabled and need Social Security Disability benefits, an experienced Georgia attorney can help you get the benefits you need. We’ve represented clients throughout the Georgia area, Tennessee, Alabama, Florida, South Carolina and North Carolina to get the benefits they deserve.