Social Security Administration Announces 2021 Cost-Of-Living Adjustment
Posted by Richard on December 8, 2020
The U.S. Social Security Administration (SSA) announced its cost-of-living adjustment (COLA) for 2021: 1.3 percent, one of the lowest increases in the program’s history, according to CNBC. The increase affects benefits for more than 64 million recipients, according to Forbes.
That means that the average retiree receiving $1,519.07 per month will see an increase of about $0.65 per day, or a little more than $237 per year, according to the Greensboro News & Record.
Other changes include an adjustment to the maximum earnings subject to the Social Security tax. Americans will pay the 6.2 percent Social Security tax on all earnings up to $142,800, a 3.7 percent increase over the previous maximum of $137,700.
If you receive Social Security benefits and continue to work, you will be able to earn up to $50,520 in 2021, up from $48,600. For every $3 you earn over the limit, your benefits will be reduced by $1.
Retirees also need to factor in Medicare Part B and Part D premiums. According to an interview in Forbes, Mary Johnson, a policy analyst with the Senior Citizens League says that the increase is disappointingly low compared to 2019’s 2.8 percent increase.
The 1.3 percent increase is the third lowest in the last decade, ranking higher than 0.3 percent in 2017 and no increase in 2016. The highest increase of the past decade was 2011, with a 3.6 percent increase.