Social Security Benefits Increase in 2021

Oct. 1, 2020

By Jack Sirard

Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 1.3 percent in 2021, the Social Security Administration reports.

The average retiree will get an increase of about $20 a month.

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 Dec. 31, 2020. 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.

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 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.

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.

Jack Sirard is a retired nationally syndicated financial columnist and Senior Editor for Senior Softball News.