The 68 million Americans who receive Social Security benefits will receive a 1.6 percent cost of living adjustment beginning in January 2020. This compares with a 2019 COLA of 2.8 percent, 2018 of 2.0 percent, 2017 of 0.3 percent and no increase in 2016.

For the average retiree who gets a monthly check of $1,460, that adds an additional $23.40 a month. About 50 percent of seniors rely on Social Security for at least half of their income and about 25 percent depend on it for at least 90 percent of their monthly income.

The good news is premiums for Medicare Part B, which automatically are deducted from most Social Security checks, are forecast to rise only $8.80 per month, thus leaving a positive net gain of $14.60 per month on average.

Other important numbers to know:

• The maximum taxable wages subject to FICA increase to $137,700 in 2020. After that, no FICA taxes are withheld.

• Per the Annual Earnings Test, individuals will be able to earn up to $18,240 per year, if they are receiving Social Security benefits before full retirement age, without forfeiting any benefits. If earnings exceed the limit, then $1 of benefits will be withheld for every $2 earned over the cap.

• The Annual Earnings Test cap for the year you reach full retirement age increases to $48,600.

To calculate the COLA for increasing Social Security benefits, the CPI-W is used. This calculates the rise in the consumer price index for urban wage earners and clerical workers.

This mostly reflects the price increases for gasoline, electronics and other products that make up a large portion of younger workers’ spending.

Many have called for Social Security to base the COLA on a new proposed index for the elderly called CPI-E. This index puts more weight on items used mostly by the elderly such as health care, which usually rises faster than the overall economy. Others have called on Social Security to use an inflation index known as “chained CPI”. This index accounts for the fact many Americans alter their spending habits when prices rise by simply substituting a less expensive product for the higher priced one. This index generally would result in slightly lower COLA’s for Social Security beneficiaries.

Remember in the background is the fact the Social Security Trustees project beneficiaries’ checks will have to be reduced by 20 to 25 percent in 2034 so outgoing benefits match incoming FICA payments.

Always seek competent tax, legal and financial advice when evaluating your Social Security benefits and retirement options.

Wm. Steve Wright is a managing member of The Wright Legacy Group LLC, a registered investment advisory firm.