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Social Security Announces 1.3 Percent Benefit Increase for 2021

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[October 14, 2020]   Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 1.3 percent in 2021, the Social Security Administration announced Tuesday.

The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2020. (Note: some people receive both Social Security and SSI benefits). The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Laborís Bureau of Labor Statistics.

Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $142,800 from $137,700.

Social Security and SSI beneficiaries are normally notified by mail starting in early December about their new benefit amount. Most people who receive Social Security payments will be able to view their COLA notice online through their personal my Social Security account. People may create or access their my Social Security account online at www.socialsecurity.gov/myaccount.

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Information about Medicare changes for 2021, when announced, will be available at www.medicare.gov. For Social Security beneficiaries receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2021 are announced. Final 2021 benefit amounts will be communicated to beneficiaries in December through the mailed COLA notice and my Social Securityís Message Center.

The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.

SEE SOCIAL SECURITY FACT SHEET BELOW

[Jack Myers
Public Affairs Specialist
Social Security Administration]

2021 SOCIAL SECURITY CHANGES

 

            Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2019 through the third quarter of 2020, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.3 percent COLA for 2021.  Other important 2021 Social Security information is as follows:

 

 

Tax Rate

2020

2021

Employee

7.65%

7.65%

Self-Employed

15.30%

15.30%

 

                 NOTE:  The 7.65% tax rate is the combined rate for Social Security and Medicare.  The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below).  The Medicare portion (HI) is 1.45% on all earnings. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.

 

 

2020

2021

Maximum Taxable Earnings

Social Security (OASDI only)

$137,700

$142,800

Medicare (HI only)

No Limit

Quarter of Coverage

 

$1,410

$1,470

Retirement Earnings Test Exempt Amounts

Under full retirement age

$18,240/yr.

($1,520/mo.)

$18,960/yr.

($1,580/mo.)

NOTE:  One dollar in benefits will be withheld for every $2 in earnings above the limit.

The year an individual reaches full retirement age

$48,600/yr.

($4,050/mo.)

$50,520/yr.

($4,210/mo.)

NOTE:  Applies only to earnings for months prior to attaining full retirement age.  One dollar in benefits will be withheld for every $3 in earnings above the limit.

Beginning the month an individual attains full retirement age

None

 

 

 

2020

2021

Social Security Disability Thresholds

Substantial Gainful Activity (SGA)

 

Non-Blind

$1,260/mo.

$1,310/mo.

Blind

$2,110/mo.

$2,190/mo.

Trial Work Period (TWP)

$   910/mo.

   $   940/mo.

Maximum Social Security Benefit: Worker Retiring at Full Retirement Age

 

$3,011/mo.

$3,148/mo.

SSI Federal Payment Standard

Individual

$  783/mo.

$  794/mo.

Couple

$1,175/mo.

$1,191/mo.

SSI Resource Limits

Individual

$2,000

$2,000

Couple

$3,000

$3,000

SSI Student Exclusion

Monthly limit

$1,900

$1,930

Annual limit

$7,670

$7,770

Estimated Average Monthly Social Security Benefits Payable in January 2021

 

Before

1.3% COLA

After

1.3% COLA

All Retired Workers

$1,523

$1,543

Aged Couple, Both Receiving Benefits

$2,563

$2,596

Widowed Mother and Two Children

$2,962

$3,001

Aged Widow(er) Alone

$1,434

$1,453

Disabled Worker, Spouse and One or More Children

$2,195

$2,224

All Disabled Workers

$1,261

$1,277

 

 

 

 

        

 

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