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Social Security COLA (copy) (copy)

Each year we announce the annual cost-of-living adjustment (COLA). Usually, there is an increase in the Social Security and Supplemental Security Income (SSI) benefit amount people receive each month, starting the following January. Law requires that federal benefit rates increase when the cost of living rises, as measured by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The CPI-W rises when prices increase for the things the average consumer buys. This means that when prices for goods and services we purchase become more expensive, on average, the COLA increases benefits and helps beneficiaries keep up with the changing cost of living.

More than 67 million Americans will see a 2.8 percent increase in their Social Security and SSI benefits in 2019.

January 2019 marks other changes based on the increase in the national average wage index. For example, the maximum amount of earnings subject to Social Security payroll tax, as well as the retirement earnings test exempt amount, will change in 2019.

Want to know your new benefit amount as soon as possible? In December 2018, we will post Social Security COLA notices online for retirement, survivors, and disability beneficiaries who have a my Social Security account. You will be able to view and save these COLA notices securely via the Message Center inside my Social Security.

Be the first to know! Sign up for or log in to your personal my Social Security account today at www.socialsecurity.gov/myaccount. Choose email or text under “Message Center Preferences” to receive courtesy notifications so you won’t miss your electronic COLA notice!

This year, even if you access your COLA notice online, you will still receive your COLA notice by mail. In the future, you will be able to choose whether you receive your notice online instead of on paper. Online notices will not be available to representative payees, individuals with foreign mailing addresses, or those who pay higher Medicare premiums due to their income. We plan to expand the availability of COLA notices to additional online customers in the future.

More information about the 2019 COLA is available at www.socialsecurity.gov/cola.

You can also read our publication about the annual cost-of-living adjustment at www.socialsecurity.gov/pubs/EN-05-10526.pdf.

Retirement benefits

Question: How are my retirement benefits calculated?

A: Your Social Security benefits are based on earnings averaged over your lifetime. Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then we calculate your average monthly indexed earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit. This is the amount you would receive at your full retirement age. You may be able to estimate your benefit by using our Retirement Estimator which offers estimates based on your Social Security earnings. You can find the Retirement Estimator at www.socialsecurity.gov/estimator.

Retirement Estimator

Q: Why doesn’t my estimate using the Retirement Estimator take into account my work as a teacher? I’ve worked for 20 years for the state and thought it would count.

A: If you work for a state or local government agency — including a school system, college, or university — your earnings may not be covered by Social Security. If you are covered only by your state or local pension plan and you don't pay Social Security taxes, your earnings won't be shown on your Social Security record. (Your record will show your Medicare wages if you pay into that program.) For information on how your pension from non-covered state or local employment may affect the amount of your Social Security benefit, you can visit www.socialsecurity.gov/retire2/wep-chart.htm.

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