Modest cost-of-living increases for Social Security recipients are back.

The 68 million Americans who rely on Social Security will receive a 1.6% bump in their benefits next year, the Social Security Administration announced Thursday. For an average retiree who gets a monthly check of $1,460, that adds up to an additional $23.40 a month, according to the Senior Citizens League, an advocacy group.

“People are going to be dipping into savings,” says Mary Johnson, a policy consultant for the Senior Citizens League, arguing that the measure of inflation used to calculate benefits doesn’t accurately reflect the spending patterns of seniors. “And when they don’t have the savings, they might have to borrow the money.”

About half of seniors rely on Social Security for at least half their income, and about a quarter depend on it for at least 90% of their income, AARP says.

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This year, recipients – which include retirees, the disabled and young survivors of deceased retirees – received a 2.8% cost-of-living adjustment (COLA), or an average $40.90 extra each month, the most since 2012. But inflation has moderated over the past year, tempering the rise in Social Security benefits.

Over the past decade, COLAs have averaged 1.4%, less than half the 3% average the previous decade, according to the Senior Citizens League. Since low COLAs have a cumulative effect over time, Social Security benefits are about 17.5% lower today than if inflation had averaged a more typical 3% over the same period, Johnson says.

“The Social Security recipients tell us their standard of living has declined,” Johnson says, noting big-ticket costs for retirees, such as health care and homeowners insurance, have risen sharply.

In fact, premiums for Medicare Part B, which are automatically deducted from many Social Security checks, are forecast to rise $8.80 month, erasing a chunk of the $23.40 cost-of-living increase. As a result, recipients with monthly benefits of about $550 will see their entire cost-of-living increase wiped out. However, under a “hold harmless” provision, Medicare premium increases generally are adjusted so they don’t reduce Social Security benefits.

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Johnson and other retiree advocates have criticized the index that SSA uses to calculate benefits. That measure, the consumer price index for urban wage earners and clerical workers, or CPI-W, has largely reflected price increases for gasoline, electronics and other products that make up a large portion younger workers’ spending.

Instead, they have called for SSA to base the COLA on a proposed index for the elderly, called CPI-E, that would put more weight on items such as health care costs, which have increased more sharply than inflation overall.

Some others, however, favor using an inflation index known as “chained CPI” that would have resulted in a slightly lower increase for Social Security recipients. That strategy would help preserve the Social Security trust fund, which is on pace to run out of money by 2035. Chained CPI accounts for the fact that many Americans alter their spending habits when prices increase, for example, by substituting a less expensive product for a pricey one.

“I think the (1.6%) increase is overstating inflation, not understating it,” says Marc Goldwein, senior vice president of the Center for a Responsible Federal Budget.

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This article originally appeared on USA TODAY: Social Security COLA 2020: Benefits to rise 1.6% in 2020