This is the time of year when seniors get some key numbers that will affect their pocketbooks in 2019: Social Security announces its cost-of-living adjustment, and Medicare releases key information about premiums and plan choices.
In his most recent “Remaking Retirement” column for Morningstar.com, journalist Mark Miller commented that Social Security beneficiaries will see a 2.8 percent cost-of-living adjustment (COLA) for 2019, the largest increase since 2012.
“Even better, most seniors will get to keep most of the COLA after it is adjusted for any dollar amount increase in the Medicare Part B premium,” wrote Miller. “The premium typically is deducted from Social Security benefits. While the official number won’t be released until later this year, the Medicare trustees forecast last summer that the standard premium will rise just $1.50 to $135.50. If that forecast holds up, most beneficiaries will keep most of the COLA.”
Miller noted that despite the good news for 2018, the long-range picture on healthcare inflation for retirees remains a concern.
Social Security benefits are becoming less valuable over time, according to Miller, and the cost of healthcare continues to rise more quickly than general inflation. For example, the Medicare trustees project that the Part B premium will start rising at a faster pace beginning in 2020, rising anywhere from 5.6 percent to 10 percent annually through 2026.