(CBS NEWS) – Social Security recipients will get a modest 1.3% cost-of-living-increase in 2021, one of the smallest-ever increases, due to low inflation.
The average increase will amount to a $20 per-month bump for the 70 million seniors and others who collect the benefit.
That would follow this year’s 1.6% increase in the cost-of-living adjustment, or COLA, according to the Social Security Administration, which announced its 2021 increase on Tuesday.
The COLA affects the personal finances of about 1 in 5 Americans, which includes Social Security recipients, disabled veterans and federal retirees.
The economic fallout from the coronavirus has reduced tax collections for Social Security and Medicare, likely worsening their long-term financial condition.
While a decline in gas prices has kept inflation low in 2020, that may not reflect seniors’ actual costs, analysts say.
Health care expenses such as Medicare premiums have been rising much faster than inflation, a problem for older Americans, who tend to require more medical services than younger people.