The Social Security Administration has announced a 1.3 percent rise in benefits in 2021, an increase even smaller than last year’s.
Cost-of-living increases are tied to the consumer price index, and a modest upturn in inflation rates and gas prices means Social Security recipients will get only a slight boost in 2021. The 1.3 percent increase is similar to last year’s 1.6 percent increase, but much smaller than the 2.8 percent rise in 2019. The average monthly benefit of $1,523 in 2020 will go up by $20 a month to $1,543 a month for an individual beneficiary, or $240 yearly.
The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $137,700 to $142,800.
For 2021, the monthly federal Supplemental Security Income (SSI) payment standard will be $794 for an individual and $1,191 for a couple.
Some years a small increase means that additional income will be entirely eaten up by higher Medicare Part B premiums. But this year, that shouldn’t be the case. The standard monthly premium for Medicare Part B enrollees is forecast to rise $8.70 a month to $153.30. However, due to the coronavirus pandemic, under the terms of the short-term spending bill the increase for 2021 will be limited to 25 percent of what it would otherwise have been.
Most beneficiaries will be able to find out their specific cost-of-living adjustment online by logging on to my Social Security in December 2020. While you can still receive your increase notice by mail, you have the option to choose whether to receive your notice online instead of on paper.
For more on the 2021 Social Security benefit levels, click here.
For a referral to a financial advisor to assist with your social security questions, contact Linda Strohschein and her team at Strohschein Law Group. To set up an appointment, contact Strohschein Law Group at 630-377-3241.
This information provided by Strohschein Law Group is general in nature and is not intended to be legal advice, nor does it constitute a legal relationship. Please consult an attorney for advice regarding your individual situation.