Social Security beneficiaries can expect to see their paychecks rise at the start of the New Year.

Continue Reading Below

The Social Security Administration announced in October that benefits would increase by 1.6 percent in 2020.

For a recipient earning $1,479, the average monthly benefit among all retired workers, checks will increase to about $1,503 per month.

For about 63 million Social Security beneficiaries, the increase will take effect in January. Higher payouts to Supplement Security Income recipients will begin on Dec. 31.

The cost of living adjustment for 2018 was 2 percent, but it was largely perceived to be offset by increases in Medicare costs.

There was a 0.3 percent increase in 2017 and no adjustment the year prior.

CORPORATE PENSION PLANS COULD BECOME A THING OF THE PAST

Cost-of-living adjustments, which began in 1975, are implemented in order to counteract the effects of inflation.

However, some senior advocacy groups have expressed concerns that costs have risen faster than inflation throughout recent years.

“Social Security’s annual COLA amount typically does not keep pace with all the increases in living expenses that most seniors face, including the costs of housing, food, transportation and, especially, health care and prescription drugs,” AARP CEO Jo Ann Jenkins said in a statement earlier this year.

She added retail drug prices have increased faster than inflation for at least 12 years, which adds to the burden of people who rely on Social Security.

RETIREMENT BILL COULD MAKE THE IRS YOUR BIGGEST IRA BENEFICIARY, EXPERT WARNS

The Senior Citizen’s League said the 1.6 percent increase in 2020 continues a “worrisome trend” where the cost of living adjustments has averaged 1.4 percent from 2000 to 2010.

Overall, the group says Social Security benefits have lost 33 percent of their buying power since 2000.

Bolstering the program has become a focus on Capitol Hill as 10,000 Baby Boomers turn age 65 each day in the U.S. and funding is running low.

Social Security’s reserve funds are expected to be depleted in 2035, at which time the program will no longer be able to pay out benefits in full.

CLICK HERE TO GET THE FOX BUSINESS APP