The Social Security Administration (SSA) recently announced that the annual cost-of-living adjustment (COLA) for benefits would be 1.3%. Here’s a closer look at some of the most significant changes affecting Social Security recipients in 2021.
Social Security checks will increase slightly. For the average retired worker, the monthly Social Security benefit will rise by $20 to $1,543 in January from $1,523 in 2020. For the average retired couple who both collect benefits, the payment will rise by $33 to $2,596, up from $2,563. The average disabled worker will see monthly benefits increase by $16 to $1,277 from $1,261. The maximum Social Security check for an individual retiring at full retirement age will rise to $3,148 a month in 2021 from $3,011 — an increase of $137.
Tax Caps Increase. As it does every year, the maximum amount of earnings subject to the payroll tax went up. In 2020, the maximum amount of taxable earnings was capped at $137,700; in 2021, that figure climbed to $142,800. Earnings over that amount aren’t subject to Social Security taxes.
Medicare Increase is Minimal. The Medicare Part B premium increase for 2021 isn’t as significant as government actuaries predicted. To offset the 2020 emergency spending and avoid a large premium increase, Congress subsidized Medicare making the Part B premium increase an estimated $4 per month.
Social Security Limits Increase. Beneficiaries under full retirement age have $1 in benefits held back for every $2 they earn from working above $18,960 a year ($1,580 a month). In the year you hit full retirement age, the earnings test limit leaps to $50,520 a year ($4,210 a month), and SSA holds back $1 for every $3 you earn. The month you reach full retirement age, Social Security stops holding money back.
Change is an everyday occurrence and knowing how economic decisions affect your financial well-being is probably top of mind for you. We know it’s hard to keep up with the changes, so we’re here to help you. Call us today at (540) 720-5656, and let’s make sure your investments are changing in a good way for you.
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Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. Megan is also a fully licensed Life, Health, and Annuity agent. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Chase Lopez joined the ILG Financial team in 2020 as an advisor. Chase is a 2016 James Madison University graduate with a degree in management. Chase has been trained under the tutelage of Dave Lopez, who is not only the founder and managing member of ILG Financial, but also is Chase’s uncle and godfather. He also enjoys working alongside his cousin, Megan, who is Dave’s daughter.