Social Security COLA Increase 2019

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Discover the 2.8% Social Security COLA increase for 2019 and how it impacts your retirement planning. Learn more at SafeMoney.com. Good news, Social Security beneficiaries! Every year in mid-October, the Social Security Administration announces any cost-of-living adjustments to benefits – or “COLAs.” On October 12, the agency said that Social Security recipients would see a 2.8% COLA in 2019. Until now, the 2018 cost-of-living adjustment had been the largest bump-up in benefits since 2012. What accounted for the heftier increase this year? A rise in the cost of energy products, not to mention an increasing cost of shelter, were big inflationary contributors, according to experts. Both of those cost categories have heavy weightings within the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the Department of Labor index on which COLAs are based.    For Social Security beneficiaries, the increased benefit payouts will start in January 2019. People receiving SSI benefits will see the increase on December 31, 2018. Effects of the COLA on Social Security Benefits How much the cost-of-living adjustment will affect benefits varies by type of beneficiary . It’s a question of who is receiving the Social Security payout. For example, a retired American may receive payments based on their personal earnings. Meanwhile, an “aged widow,” or someone who lost their spouse and is at least age 60, may receive survivor benefits from Social Security based on their spouse’s record. The Social Security Administration provides a table below, which can helpful for seeing the effects of the increase. It shows before-and-after calculations for average benefits going to different types of beneficiaries. What Does It Mean for Retirees? According to data from the U.S. Bureau of Labor Statistics, Social Security is a major income source for the average retiree household . A typical retired household draws an average yearly income of $24,673 from Social Security as well as private and government pensions. Apart from being a foundation of many retirement income plans, Social Security also provides a source of “permanent” income – or an income stream that generally doesn’t fluctuate from year to year. Other income-generating sources, such as retirement accounts, may