2020 Social Security COLA
The 2020 Social Security COLA is 1.6%.
Effective 2020-01-01Source: Cost-of-Living Increase and Other Determinations for 2020 (SSA)Verified 2026-09-01
Compared with 2019
| Item | 2019 | 2020 | Change |
|---|---|---|---|
| Cost-of-living increase | 2.8% | 1.6% | -1.2% (-42.9%) |
Who it applies to
The increase applies to people receiving Social Security retirement, survivors or disability benefits under title II of the Social Security Act, and to people receiving Supplemental Security Income under title XVI. Both rise by 1.6 percent. A title II benefit reflects the increase from the December 2019 benefit, which is payable in January 2020; an SSI payment reflects it from the payment made for January 2020. It is a single rate rather than a per-person calculation, so every benefit it applies to rises by the same 1.6 percent and what differs between people is the amount the rate is applied to. The same notice settles other program amounts for 2020 as well, among them the contribution and benefit base, the retirement earnings test exempt amounts and the substantial gainful activity amounts; this page states the cost-of-living increase only, and each of those is a separate figure with its own sentence in the notice.
What changed this year, and why
The Social Security Administration determined a cost-of-living increase of 1.6 percent for 2020. Its notice states the increase as 1.6 percent for benefits under title II of the Social Security Act and for payments under title XVI, so retirement, survivors and disability benefits and Supplemental Security Income payments all rise by the same 1.6 percent. Under title II the increase reaches individuals eligible for December 2019 benefits, which are payable in January 2020. SSI payments increase by 1.6 percent effective for payments made for January 2020. The increase for 2019 was 2.8 percent; each year's figure is determined on its own and stated in its own notice.
Common questions
- What is the 2020 Social Security COLA?
- It is 1.6 percent. SSA's notice for 2020 states that the cost-of-living increase is 1.6 percent for benefits under title II of the Social Security Act and for payments under title XVI.
- When does the 2020 COLA take effect?
- Under title II it is effective for individuals eligible for December 2019 benefits, which are payable in January 2020. That is why an increase settled in the autumn of 2019 is the increase people see in their 2020 payments.
- Does the 2020 COLA apply to Supplemental Security Income?
- Yes. Federal SSI payments also increase by 1.6 percent, effective for payments made for January 2020. The notice states the same increase for title XVI payments as for title II benefits.
- Who settles the COLA, and where is it published?
- The Social Security Administration does, and it publishes the determination as a notice in the Federal Register titled "Cost-of-Living Increase and Other Determinations for 2020". That notice is the document this page cites, and it is where 1.6 percent is stated in a sentence.
- How is the cost-of-living increase worked out?
- From the Consumer Price Index for Urban Wage Earners and Clerical Workers, which the Bureau of Labor Statistics produces. SSA compares that index for the calendar quarter ending in September with the same quarter of the most recent year in which an increase was determined, and rounds the result. For 2020 that computation gave 1.6 percent.
- Does every beneficiary get the same increase?
- The rate is the same for everyone it applies to: the notice states a single increase of 1.6 percent for benefits under title II and payments under title XVI. What differs between people is the benefit the rate is applied to, not the rate itself.
- What else does the same notice decide?
- The notice that carries the 1.6 percent increase also settles other amounts for 2020, including the contribution and benefit base, the retirement earnings test exempt amounts, the substantial gainful activity amounts and the SSI student earned income exclusion. Each of those is a separate figure with its own sentence in the notice, and this page publishes the cost-of-living increase only.
- How does the 2020 COLA compare with the year before?
- The increase for 2020 is 1.6 percent. The increase for 2019 was 2.8 percent. Each year's figure is settled on its own and stated in its own notice, so an increase in a given year does not carry into the next.
How the increase is computed, and when there is none
The Social Security Administration calculates the annual cost-of-living adjustment by comparing the Consumer Price Index for the third quarter of the current year to the third quarter of the previous year. The percentage increase in the CPI, if any, between these two quarters determines whether benefits go up and by how much. To arrive at a single CPI figure for each quarter, the law requires using the arithmetic mean of the index values for the three months in that quarter. If the third quarter of the current year shows no increase over the previous year's third quarter, there is no cost-of-living adjustment for that year. The increase is applied to benefits that start no earlier than December of the year the adjustment is announced, and it is paid in the following month.
The law states that a cost-of-living increase for benefits is determined based on the percentage increase, if any, in the CPI from the last computation quarter to the third quarter of the current year.
Cost-of-Living Increase and Other Determinations for 2020 (SSA)
Only three months of the CPI decide it
The increase is not measured over a year of prices. The Act defines a cost-of-living computation quarter as three months, and the index for that quarter is one number: the arithmetic mean of the index for the 3 months in it. That mean is rounded to the nearest 0.001 before any comparison is made, and the comparison is then between two such means a year apart. Two things follow for anyone reading the 1.6% on this page against inflation reported elsewhere. Prices in the other nine months of the year never enter the calculation directly; they matter only insofar as they are still showing in the third quarter when it comes round. And a sharp move late in the year does not raise the increase announced for 2020. It falls inside the following year's quarter, so it is carried into the next announcement instead.
Section 215(i)(1) of the Act states that the CPI for a cost-of- living computation quarter is the arithmetic mean of this index for the 3 months in that quarter. In accordance with 20 CFR 404.275, we round the arithmetic mean, if necessary, to the nearest 0.001.
Cost-of-Living Increase and Other Determinations for 2020 (SSA)
It starts with December benefits, paid in January
The 1.6% cost-of-living adjustment for 2020 does not take effect immediately in January. Instead, the increase begins with benefits for December 2019, which are payable in January 2020. This timing means recipients see the higher amount in their January bank accounts, but the increase is technically credited to December. For those who became eligible for benefits after 2019, the 1.6% increase does not apply at all, since they were not yet receiving benefits when the adjustment was calculated. The COLA affects only those already in the system before the new year.
benefits will increase by 1.6 percent beginning with benefits for December 2019, which are payable in January 2020.
Cost-of-Living Increase and Other Determinations for 2020 (SSA)
Working before full retirement age withholds part of the benefit
If you work while receiving Social Security benefits before reaching full retirement age, the program may withhold some of your benefits when your earnings exceed certain limits. The withholding rate depends on when you reach full retirement age. For beneficiaries who reach full retirement age during the year, the rules are more generous: benefits are reduced by $1 for every $3 of earnings over the annual exempt amount, but only for months before reaching full retirement age. For all other beneficiaries under full retirement age, the reduction is steeper, though still $1 in benefits withheld per a fixed increment of excess earnings. Once you reach full retirement age, there is no withholding regardless of how much you earn. The 1.6% COLA for 2020 does not change these earnings test rules.
For beneficiaries who attain NRA in the year, we withhold $1 in benefits for every $3 of earnings over the annual exempt amount for months before NRA.
Cost-of-Living Increase and Other Determinations for 2020 (SSA)
The year you reach full retirement age has its own limit
The year you reach full retirement age has special rules that are more favorable than other years when you work while receiving benefits. A higher exempt amount applies in the year in which a person attains NRA, but only for earnings in months before reaching that age. This means if you turn 66 or 67 during 2020, you get the benefit of the higher earnings limit for the months leading up to your birthday month. After you reach full retirement age, there is no earnings test at all, regardless of how much you earn. The higher exempt amount for 2020 applies specifically to those reaching NRA during that calendar year, and the 1.6% COLA does not change the earnings test rules themselves.
A higher exempt amount applies in the year in which a person attains NRA, but only for earnings in months before such attainment.
Cost-of-Living Increase and Other Determinations for 2020 (SSA)
What earnings count as substantial gainful activity
Social Security uses earnings thresholds to determine whether someone is engaging in substantial gainful activity, which affects disability benefit eligibility. A person who is earning more than a certain monthly amount is ordinarily considered to be engaging in SGA. The monthly earnings threshold depends on the nature of the disability. For statutorily blind individuals receiving title II benefits, the SGA amount is set by statute and was higher in 2020. For non-blind disabled individuals, the SGA amount is determined by regulations and was also updated for 2020. The amounts are adjusted annually based on changes in national average wages. If your earnings exceed the applicable SGA amount, Social Security may determine that you are not disabled under their rules, which could affect your benefit eligibility.
A person who is earning more than a certain monthly amount is ordinarily considered to be engaging in SGA.
Cost-of-Living Increase and Other Determinations for 2020 (SSA)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Cost-of-Living Increase and Other Determinations for 2020 (SSA)
- Cost-of-living increase
The cost-of-living increase is 1.6 percent for monthly benefits under title II and for monthly payments under title XVI of the Act.