Oct. 10 (UPI) -- The Social Security Administration announced Thursday it will raise recipients' cost-of-living allowance next year by 1.6 percent, a significantly lower adjustment than retirees saw for 2019.
The administration said the Social Security and Supplemental Security Income benefits hike for 2020 will impact nearly 70 million Americans.
"The [raise] will begin with benefits payable to more than 63 million Social Security beneficiaries in January," the administration said. "Increased payments to more than 8 million SSI beneficiaries will begin on December 31."
For the average retiree who receives $1,460 per month, the increase boosts the payment to about $1,483.
The agency said the annual adjustment is partly determined by the Consumer Price Index, a Labor Department gauge that measures the average change in the costs for goods and services. The amount is also influenced by the increase in average U.S. wages. The CPI for September, released Thursday, showed prices for goods remained flat last month.
"Based on that increase, the maximum amount of earnings subject to the Social Security tax will increase to $137,700 from $132,900," the SSI noted.
The 1.6 percent hike is significantly less than recipients saw this year, when the administration raised payments by 2.8 percent. The 2018 adjustment was 2 percent and there were no increases in 2010, 2011 and 2016. The average adjustment this decade is 1.4 percent.
Despite the adjustment, tax rates for Social Security income will not change. Analysts expect some of the 2020 increase, however, will be offset by an increase in premiums for Medicare Part B, which are usually deducted automatically from Social Security payments.