Social Security recipients should see a 1.3% cost-of-living adjustment in 2021, smaller than the 2020 COLA, according to the Senior Citizens League.
This comes several months after the lobbying group expected falling oil prices to zero out the COLA for 2021. But in July, it updated its estimate to a 1.1% increase as prices rose for gas and some other items.
The official COLA is set to be announced by the Social Security Administration on Oct. 13. It was 1.6% in 2020.
“Our forecast is based on Consumer Price Index data through August, and there is still one more month of … data to come in before we get the official announcement in October,” said Mary Johnson, Social Security policy analyst for the Senior Citizens League, in a statement.
The inflation rate from May to August points to the COLA rising as much as 1.4%. However, price changes from June through August in combination with a downward trend in gas prices “seem to indicate it will probably be 1.3%,” Johnson explained.
The advocacy group says there’s a 5% chance the 2021 COLA will top 1.3% and a 15% likelihood it will be lower.
If the COLA turns out to be 1.3%, it would be the fifth time since 2010 that seniors will see a very low, or even no, annual inflation adjustment. The COLA was zero in 2010, 2011 and 2016, and it was 0.3% in 2017.