 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 Labor’s
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.
[to top of second
column] |
 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 Security’s 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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