Starting December 31, 2018, Social Security benefits and Supplemental Security Income (SSI) benefits went up for the more than 62 million Social Security beneficiaries and more than 8 million SSI beneficiaries. The cost-of-living adjustment is known as a “COLA.” The COLA is tied to the Consumer Price Index determined by the Bureau of Labor Statistics at the Department of Labor.
The Consumer Price Index (CPI) that governs COLA revealed that prices for certain goods have gone up. Because the items measured by the CPI are more expensive, a COLA is necessary to make sure that beneficiaries can still afford the same necessities for daily living.
The COLA for 2019 is 2.8 percent. For Social Security retirement or disability beneficiaries this increases their monthly benefit amount based on how much they paid in. To check your own Social Security benefit contact the Social Security Administration or log into your account on mySocialSecurity.
For SSI beneficiaries the amount has increased by $21 to $771 per month.
The COLA also affects the maximum amount of earnings subject to Social Security Tax. The total taxable earnings for Social Security increases in 2019 to $132,900. Any additional earnings over that amount are not taxed for Social Security purposes.
This 2.8 percent increase is the largest increase since December 2011, when the COLA was 3.1 percent. Some years there is no COLA as in 2009 and 2010, when prices did not go up at all. The largest COLA was in 1980, when the COLA was 14.3 percent due to a large increase in prices. The 2019 COLA is larger than the 2018 cola, which was 2.0 percent.
The COLA is always added on top of any previous COLA rather than starting over at the original base amount. For example, if a beneficiary received $100 in 2017, that benefit would go up to $102 for For 2019, the beneficiary would receive another 2.8 COLA for a total of $104.85.