Social Security Recipients Will See Larger Checks Next Year, But May Not Be Enough

There’s good and bad news for Social Security and disability recipients: According to the Social Security Administration (SSA), older Americans will see a 1.3% increase in monthly benefits. The average recipient is expected to get $20 more per month, raising payments from $1,523 to $1,543.

But, data from the Bureau of Labor Statistics shows that this modest increase is unlikely to make up for rising medical costs. The department found that medical services have risen 5% in the last year while home care has increased by 4%. 

The raise is intended to ensure Social Security and disability payments keep up with inflation rates, which is determined by appraising the year-over-year difference in the third-quarter consumer price index from 2019 to 2020, according to Yahoo Money. 

Currently, nearly 64 million older Americans are enrolled in the Social Security program. The change will take effect beginning this January, while those receiving Supplemental Security Income (SSI) will see larger payments on December 31 this year.

The SSA will send recipients letters beginning in the first week of December to inform them about the additional payments. In the meantime, beneficiaries can view the new benefits by checking their account through the SSA website.

In addition, the maximum income amount subject to the Social Security contribution rose from $137,700 to $142,800 for workers. This change will also begin in January. 

The SSA applies the consumer price index for urban wage earners (CPI-W), a monthly gauge of the mean difference over time for the costs of goods and services urban wage earners and clerical employees pay. 

Although the CPI-W has remained the standard for deciding this benefit increase, some, including former vice president and Democratic presidential nominee Joe Biden, have pushed for the program to follow the consumer price index for the elderly (CPI-E). This measure tracks the spending among Americans 62 and older. In addition, it gives more weight to health care costs, which would facilitate quicker raises relative to the CPI-W.

According to Mary Johnson, who analyzes Social Security and Medicare policy for The Senior Citizens League, “Collectively, increases in Medicare premiums are going to outstrip the amount that most people get in their COLA.” notes that for older Americans dealing with increasing Medigap and Medicare Part D Prescription drug costs, it’s possible that the extra $20 will disappear quickly under Cost-Of-Living Adjustments (COLA) such as Medicare premium hikes.

Moreover, this is only one part of what will likely be a prolonged pattern. “The problem is the length of time retirees have been getting these low COLAs, and the compounding effect of those low COLAs,” Johnson added. 

Ever since the recession, the COLA has maintained an average of 1.4% — only half of what it was in the previous decade. Because of this, Johnson says, “It can really erode the retirement income retirees receive over time.”

For older Americans looking to make the most of their government benefits, one way is to make the most of Medicare open enrollment from October 15 to December 7. Beneficiaries can shop for better deals and compare prices for Medicare Part D coverage in their area.’s Out of Pocket Cost Estimator can make it easier to compare expenses when comparing prices.


  • Fried, Carla. “The Average Social Security Check Will Be About $20 Larger Next Year.” Money, 13 Oct. 2020,
  • Singh, Dhara. “Social Security Recipients Will Get $20 More Each Month in 2021.” Yahoo! Finance, Yahoo!, 13 Oct. 2020,


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