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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.<\/p>\n
Social Security checks will increase <\/b>slightly.<\/b> For the\u00a0average 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 \u2014 an increase of $137.<\/p>\n
Tax Caps Increase.<\/b> 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.<\/p>\n
Medicare Increase is Minimal.<\/b> The\u00a0Medicare Part B\u00a0premium 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.<\/p>\n
Social Security Limits Increase.<\/b> 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.<\/p>\n