The Social Security Administration announced Tuesday that the cost-of-living adjustment for retirees receiving Social Security benefits would increase by only 1.3 percent in 2021, the second year in which adjustments had been lower than the year before.

“The 1.3 percent cost-of-living adjustment will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million [Supplemental Security Income] beneficiaries will begin on December 31, 2020,” SSA said in a news release.

The Bureau of Labor Statistics calculates the cost-of-living adjustment — known as the COLA — each year based on the consumer price index for workers, which measures the changing prices of common goods that the average worker would be exposed to.

But the National Active and Retired Federal Employees Association has long taken issue with that form of calculation, as it ignores the differences in costs experienced by the elderly, who receive Social Security benefits, rather than the standard worker.

“This insufficient COLA fails to keep up with inflation experienced by seniors, further eroding their purchasing power. The cost of health care continues to rise faster than other goods. Seniors spend more on health care than any other segment of the population — just as the nation struggles to contain a virus that poses particular danger to older Americans. And federal retirees will almost certainly be further burdened by significantly higher Federal Employees Health Benefits program premiums, which have yet to be announced for 2021,” NARFE National President Ken Thomas said in a statement.

“This didn’t need to happen. For years, NARFE has urged Congress to address the inequity of COLAs that don’t keep up with rising health care costs by passing legislation requiring the BLS to calculate COLAs based on the consumer price index for the elderly instead of the consumer price index for workers.”

COLA adjustments have varied widely each year, from no increase announced in 2015 to a 14.3 percent increase in 1980. In the past two decades, COLA increases have only twice gone above four percent.

Military veterans will also see an increase to some of their benefits based on the COLA increase.

Last month, lawmakers approved plans to link a cost-of-living increase in veterans benefits with the annual Social Security boost. Under current law, Congress must approve the veterans benefits increase each year, while Social Security beneficiaries see the boost automatically.

Veterans benefits covered include disability compensation, compensation for dependents, clothing allowances, and dependency and indemnity compensation checks.

Social Security beneficiaries should be notified of their new benefit amount starting in early December, though most recipients should be able to view that notice via their online Social Security accounts.

Military Times Deputy Editor Leo Shane contributed to this report.

Jessie Bur covers federal IT and management.

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