The Social Security Administration recently announced the annual cost-of-living adjustment increase for 2021. The increase in benefits isn’t the only change coming next year. Let’s take a closer look at some of the significant changes affecting Social Security recipients in the new year.
Cost-of-Living Adjustment (COLA) Information for 2021
Approximately 70 million beneficiaries will see a 1.3% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2021.
Social Security and SSI beneficiaries are usually notified by mail about their new benefit amount starting this month. Most beneficiaries can view their COLA notice online through their personal Social Security account.
Larger Checks For Retired and Disabled Workers
For average retired workers, monthly Social Security benefit will rise by $20 to $1,543. For retired couples who both collect benefits, payments will increase by $33 to $2,596. Lastly, the average disabled worker will see their monthly benefits increase by $16 to $1,277. The maximum check for an individual retiring at full retirement age will rise to $3,148 a month in 2021, an increase of $137.
SSI Recipients Also Get A Raise
Supplemental Security Income (SSI) beneficiaries, a program administered by SSA to help specific individuals with little to no income to meet their living needs, will also see a 1.3% increase in their monthly benefits. This increase translates to about $11 more a month for an average recipient and $16 more a month for couples.
Tax Cap Sees an Increase
The payroll tax that funds Social Security is currently set at 12.4% on eligible wages. Employees pay 6.2%, and employers pay the other 6.2%. The money paid in by current workers goes to cover current benefits, and any excess funds to the Social Security trust fund.
Each year, the maximum amount of earnings subject to the payroll tax goes up. In 2020, the full amount of taxable earnings is capped at $137,700. In 2021, that figure rises to $142,800. Payments over that amount are not subject to Social Security taxes the following year.
A Break On Medicare Premiums
Under a recent change in law, the new Medicare premium in 2021 will be less than previously predicted. Originally, higher emergency Medicare spending due to the COVID-19 pandemic was expected to lead to higher Medicare premiums in the new year. If the law had not been changed, beneficiaries wouldn’t have seen their COLA increase due to Part B premium increases.
Call the Disability Attorneys at Carter Mario
Curious about starting the disability process, but not sure where to start? Contact the Social Security disability lawyers at Carter Mario, and we’ll make sure you get the maximum disability benefits you deserve. We provide 24/7 access to our compassionate attorneys, along with our exclusive Zero Fee Warranty. Call (203) 806-9256 to get started today with a no-obligation, free legal consultation.