[NFBF-L] Social Security and Medicare 2020 monthly premium

Sun Oct 18 12:48:29 UTC 2020

Thanks Brian for the information.  It will at least provide some cat food!
(LOL)

Wishing yo a great week!

Merry

From: NFBF-L <nfbf-l-bounces at nfbnet.org> On Behalf Of Brian Norton via
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Subject: [NFBF-L] Social Security and Medicare 2020 monthly premium

Social Security and Medicare 2020  monthly premium 

| The Social Security Administration (SSA) announced on Oct. 13 that its
annual cost-of-living adjustment (COLA) will be 1.3 percent, an average
boost to retirement benefits of about $20 per month for individuals starting
in January.

The modest gain for monthly benefits is the latest in a decade of meager
COLA increases. Social Security COLAs have averaged a 1.65 percent increase
annually the past decade, with no increase at all to benefits in 2016. The
increase that went into effect in January 2020 was 1.6 percent.

"Today's announcement of a 1.3 percent COLA increase - while modest - is
needed to help Social Security beneficiaries and their families try to keep
up with rising costs," says AARP Chief Executive Officer Jo Ann Jenkins.
"The guaranteed benefits provided by Social Security and the COLA increase
are more crucial than ever as millions of Americans continue to face the
one-two punch of the coronavirus's health and economic consequences. In
fact, thanks to recently enacted changes supported by AARP to lower the
Medicare premium for next year, more seniors will at least see a small
monthly COLA."

Why so low?

COLAs have been low because inflation has been tame. The annual COLA is
based on the change in the Consumer Price Index for Urban Wage Earners and
Clerical Workers (CPI-W) from the third quarter of the previous year to the
third quarter of the current year. The CPI-W represents the prices paid by
workers for a basket of goods and services. It is not based on a market
basket that reflects what retirees purchase - the CPI-E - which represents a
market basket that better reflects retiree spending, such as higher costs
for health care.

This year's COLA calculation looks at the average CPI-W index numbers for
July, August and September of 2019 and compares them with the numbers for
the same three-month span in 2020. The percentage change between the two
quarterly averages is the COLA for the following year starting in January.
If there's no change, or if there's a decline in the CPI-W, there's no
increase in Social Security benefits.

Since Congress initiated
<https://eur06.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aarp.
org%2Fretirement%2Fsocial-security%2Finfo-2020%2Fcolas-history.html&data=04%
7C01%7C%7C9888601c0f8b4036cccc08d872f15d63%7C84df9e7fe9f640afb435aaaaaaaaaaa
a%7C1%7C0%7C637385728292063625%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiL
CJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=tglKnpX4rB8xL5cJX
ehBxr9ny8CnYTdaTNL4kKIdFwo%3D&reserved=0> automatic annual COLAs in 1975,
there have been three years in which benefits didn't increase at all: 2010,
2011 and 2016. The single biggest increase, 14.3 percent, went into effect
in January 1981.

Social Security is
<https://eur06.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aarp.
org%2Fretirement%2Fsocial-security%2Fquestions-answers%2Fhow-is-social-secur
ity-funded%2F&data=04%7C01%7C%7C9888601c0f8b4036cccc08d872f15d63%7C84df9e7fe
9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637385728292073620%7CUnknown%7CTWFpbGZsb3d
8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&s
data=SUBDLFhyHzxpNwMI%2FD%2BPjeHIiHczORFdLjoc2i5Uvio%3D&reserved=0> funded
by a payroll tax of 12.4 percent on eligible wages - employees pay 6.2
percent and employers pay the other 6.2 percent (with self-employed workers
paying the entire 12.4 percent). Next year, the maximum amount of earnings
subject to the Social Security tax will increase to $142,800 from $137,700.
The money paid in by today's workers goes to cover current benefits, with
any excess going into the Social Security trust fund.

Because of the growing number of Social Security beneficiaries - and, in
part, a decrease in payroll taxes collected because of
<https://eur06.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aarp.
org%2Fwork%2Fjob-search%2Finfo-2020%2Fseptember-unemployment-rate.html&data=
04%7C01%7C%7C9888601c0f8b4036cccc08d872f15d63%7C84df9e7fe9f640afb435aaaaaaaa
aaaa%7C1%7C0%7C637385728292073620%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMD
AiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=qBq2bPY5BoqjRA
gmo98DJFBn%2BXp9bkXTLnLO84D2dDE%3D&reserved=0> pandemic-driven job losses -
the Social Security system is facing increased stress. In their annual
report, Social Security's trustees estimated that the trust fund for retired
workers and their survivors will run short of money in 2034. A more
pessimistic forecast from the Congressional Budget Office estimated that the
reserves in the trust fund for retired workers and their survivors will be
<https://eur06.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aarp.
org%2Fretirement%2Fsocial-security%2Finfo-2020%2Fbenefits-trust-fund-runs-ou
t-by-2031.html&data=04%7C01%7C%7C9888601c0f8b4036cccc08d872f15d63%7C84df9e7f
e9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637385728292083614%7CUnknown%7CTWFpbGZsb3
d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&
sdata=DtrQINVCkjj5xxbQjY9lQNwQgIhSmmshYtFY3FsCHbA%3D&reserved=0> depleted in
2031. Even at that point, over three-quarters of benefits could still be
paid out from incoming payroll taxes.

Social Security and Medicare Part B premiums

Most Social Security recipients will see their COLA reduced by an increase
in the
<https://eur06.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.aarp.
org%2Fhealth%2Fmedicare-insurance%2Finfo-2020%2Fwhat-is-medicare.html&data=0
4%7C01%7C%7C9888601c0f8b4036cccc08d872f15d63%7C84df9e7fe9f640afb435aaaaaaaaa
aaa%7C1%7C0%7C637385728292093608%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDA
iLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=EyzSLaMKdzlZhXo
csSU8foievZVm8X%2FSA4ZwB0FZRoM%3D&reserved=0> Medicare premium. Medicare
Part B premiums, which cover physician visits and outpatient medical
services, are deducted directly from Social Security benefit payments. The
2021 monthly premium for Medicaid Part B recipients is expected to be
announced soon.

Under a recent change in law championed by AARP, the Medicare premium
increase for this year will be reduced, thus preserving a COLA for most
beneficiaries. Initially, higher emergency Medicare spending due to COVID-19
was projected to lead to very high Medicare premiums. Had the law not been
changed, most beneficiaries would have seen their COLA wiped out by Part B
premium increases, which for some beneficiaries were projected to be as high
as $25 to $50 per month. Even with the change in law, the increases in
payments to most Social Security beneficiaries are expected to be quite
small.

"Social Security is arguably the most important and successful program in
our nation's history, providing vital benefits that individuals earn through
a lifetime of hard work and contributions to the system," Jenkins says. "It
is the largest source of retirement income for most Americans and provides
nearly all income (90 percent or more) for 1 in 4 seniors. AARP will
continue advocating for bipartisan solutions to help ensure the long-term
solvency and adequacy of the Social Security program, to maintain its
dedicated funding stream and to protect the hard-earned benefits of millions
of Americans and their families.costs

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