The Social Security Administration is scheduled to release the 2021 Cost-of-Living Adjustment for Social Security tomorrow (October 13, 2020). Operators of affordable housing properties should be on the look-out for the announcement and include the increase in projected income for the upcoming year (beginning in January 2021).
The SSA calculates the percent change between average prices in the third quarter of the current year with the third quarter of the previous year; that’s why the final number comes out in October and it’s likely that those figures (the third-quarter comparison) will show an increase. Note that the Social Security Administration ties its adjustment for Social Security benefits to the wage earners’ consumer price index, which is similar to, but not the same as, the urban dwellers’ consumer price index (which drives inflation reporting). Based on the percent change during that time, I estimate about a 1.2% COLA for 2021.
There have been three years (2010, 2011, and 2016) with no COLA increase. Since 2009, the average COLA has been 1.75% with the highest being 5.8% in 2009.
Managers should also remember that the COLA will apply to SSI, VA, Civil Service, and Railroad retirement.