Social Security Cost-of-Living Adjustment Could Be 1.3 Percent in 2021

With the U.S. Social Security Administration set to officially announce its 2021 cost-of-living adjustment (COLA) in about a month, data suggests seniors who depend on Social Security for their retirement may be disappointed, reports CNBC . The Senior Citizens League estimates that the COLA could be about 1.3 percent, based on Consumer Price Index data through August. That is compared to the 1.6% increase in benefits in 2020, while last year's bump was 2.8 percent. The Senior Citizens League's Mary Johnson said a 1.3 percent adjustment would be the fifth instance since 2010 of a small or no increase. The COLA was zero in 2010, 2011, and 2016, while in 2017 it was 0.3 percent. The average COLA has been 1.4 percent 2010, while annual hikes averaged 3 percent between 1999 and 2009. Critics say the Consumer Price Index for Urban Wage Earners and Clerical Workers used to calculate the adjustment does not account for the price changes that impact older consumers, especially housing and medical costs. Johnson noted that the 1.3 percent estimate could possibly rise to 1.4 percent by October, barring a further drop in the price of gasoline.