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Your Social Security checks could get bigger next year. Here’s how much

Key Points
  • Social Security benefits could get a 1.6% cost-of-living adjustment in 2020, according to one new estimate.
  • The Social Security Administration is expected to officially announce its cost-of-living adjustment in October.
  • The modest increase comes at a time when retirees face a growing problem: diminished buying power.

When it comes to the forecast for your Social Security benefits in 2020, there's good news and bad news.

Your Social Security checks are poised to grow next year; however, the annual increase likely won't be as much as you got in 2019.

That's according to The Senior Citizens League, which on Thursday released its latest estimate for the Social Security cost-of-living adjustment for 2020.

The nonpartisan group estimates that beneficiaries will get a 1.6% boost in 2020, down from a 2.8% increase in 2019.

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That would raise the average retiree benefit of $1,460 by about $23.40 per month, compared with $40.90 this year.

The Social Security Administration is expected to announce the cost-of-living adjustment for 2020 in October.

The adjustment is calculated based on data from the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, through the third quarter.

The Senior Citizens League bases its estimate on data through August, and has a record of accurate predictions.

A 1.6% increase would be the lowest since 2017, the organization said. Social Security cost-of-living adjustments have averaged 1.4% in the past decade.

What's worse, Social Security benefits have lost one-third of their buying power since 2000, according to The Senior Citizens League's calculations.

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Meanwhile, Medicare Part B premiums are expected to increase to $144.30 per month in 2020 from $135.50 this year, according to estimates from Medicare trustees.

Consequently, individuals who receive the lowest Social Security benefits — $550 or less — might not see any increase in their Social Security checks because of those higher premiums, The Senior Citizens League said.

However, there is a law, called the hold harmless provision, that prevents Social Security benefits from being reduced by higher Medicare Part B premiums. That applies to about 70% of Medicare beneficiaries, according to The Senior Citizens League.

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source: CNBC

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