December 23, 2018
By: Dwayne Page
Social Security benefits will increase 2.8 percent in 2019, the largest cost-of-living adjustment (COLA) in seven years.
The COLA will increase the average Social Security retirement benefit by $39 a month or roughly $468 a year. The average single retired Social Security recipient is expected to receive $1,422 in December 2018 before increasing to $1,461 a month later. The COLA affects household budgets for about 1 in 5 Americans, including Social Security beneficiaries, disabled veterans and federal retirees.
AARP Chief Executive Officer Jo Ann Jenkins said, “The 2.8 percent COLA brings needed income security to those Social Security beneficiaries and their families who depend on their earned, modest benefits. The COLA is particularly important for the tens of millions of families who depend on Social Security for all or most of their income. Unfortunately, the cost of living increase may not adequately cover their expenses that rise faster than inflation including health, prescription drug, utility and housing costs.”
Meanwhile premiums and deductibles for Parts A and B will increase slightly in 2019.. Standard monthly premiums will cost $1.50 more: $135.50, up from $134 in 2018.
Because premiums are based on income, beneficiaries with annual incomes greater than $85,000 will pay more ($189.60 for individuals with incomes between $85,000 and $107,000, for instance).
Annual deductibles will rise $2 next year to $185, up from this year’s $183.
Medicare Part B covers outpatient care and doctor visits; Part A covers hospitalization and some nursing home and home health care services. The inpatient deductible for hospital stays will increase by $24, to $1,364, next year.
Social Security is financed by a tax on workers’ wages. Next year, the maximum amount of earnings subject to the Social Security tax will increase from $128,400 to $132,900.