Last week the Social Security Administration announced a 2.8% Cost-of-Living Adjustment, or COLA, beginning in January 2019. It’s the biggest increase since 2012.
The current average Social Security benefit is $1,422 in 2018, that benefit will go up to $1,461 in 2019 for a single benefit. On average for couple both receiving benefits, they will rise from $2,381 to $2,488. See the tables below for more details.
Why the Increase?
The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which increased from the third quarter of 2017 to the third quarter of 2018. The purpose of the COLA is to ensure that inflation doesn’t diminish the purchasing power of those who receive benefits. It’s estimated that more than 67 million will receive the increase. The CPI-W is determined by the Bureau of Labor Statistics, a part of the Department of Labor and is the official measure used by the Social Security Administration to calculate COLAs.
It’s also important to note the maximum earnings subject to Social Security tax will also rise from $128,400 in 2018 to $132,900 in 2019. So, if you’re working you may be subject to additional Social Security taxes in 2019.
How Much Will My Benefit Change?
The Social Security Administration will issue COLA notices in December 2018 to most receiving benefits via the Message Center on their mySocialSecurity online portal. (You can sign up for an account at ssa.gov/myaccount.)
If you have questions regarding your Social Security benefits such as how to claim, when to claim, or how Social Security will impact your overall financial plan we’re here to help. Our Financial Advisors are ready to address any questions you have regarding your Social Security Benefits. To have a conversation with one of our advisors by phone, email, or in-person fill out the form below or call us at 913-393-1000 and an advisor will contact you to schedule a conversation.
Investment advisory services offered through Barber Financial Group, Inc., an SEC Registered Investment Adviser. The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.
Social Security Administration – October 18, 2018: https://www.ssa.gov/cola/
Social Security Administration – October 18, 2018: www.ssa.gov/oact/cola/colaeffect.html
Social Security Benefits to Increase 2.8% with 2019 Cola Adjustment – October 18, 2018 – https://www.kiplinger.com/article/retirement/T051-C001-S001-social-security-benefits-to-increase-in-2019.html