The Social Security Administration (SSA) estimates that 65 million U.S. citizens will receive Social Security benefits in 2020. That’s an estimated $1 trillion in support. How Social Security Is Adjusting in 2021 and What That Means for You But these benefits are more than big numbers. Social Security provides income to those with disabilities, widowers, retirees, and many, many other diverse groups of people. It offers a livelihood to those who have worked hard to earn retirement after a lucrative career or those who may face obstacles or challenges with their earning capabilities. Yet, like many aspects of government, it’s constantly evolving. If you’re one of those 65 million people relying on Social Security, here are the biggest changes you need to know for 2021. New Year, New Changes
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A Slight Increase
To compensate for inflation, the SSA’s cost-of-living adjustment
is about 1.3% for the new year. This is believed to better place the monthly Social Security payment at the cost needed for standard living expenses. AARP reports that this is an
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extra $20 for the average retired worker and $33 for
retired couples. Widowers may see anywhere from $19–$39 in added benefits, while those with disabilities may see a jump from $16–$29. Supplemental Security Income (SSI) recipients will also see a small increase.
Adjustments for Medicare Those age 65 or older who are enrolled in Medicare Part B coverage will continue to see automatic deductions from their monthly Social Security
benefits. However, many recipients who fall under this category will not see the increase due to considerations brought about by COVID-19, according to AARP.
Earnings Test and Tax Caps Jump Social Security is funded through taxes on employers and employees, but the cap at which an employee can no longer be taxed per year is jumping from $137,700 to $142,800. This increase will also be seen in the earnings test, which is applied to retirees who take Social Security benefits before retirement age. The idea is that for every $2 they earn above a certain amount, about $1 is held back. In 2020, that amount was $18,240 per year, but in 2021, it will increase to $18,960. That number also jumps to $50,520 from $48,600 in the year you hit retirement age.
If you have questions about how these updates will affect your payments, please visit SSA.gov. You can also call 1-800-772-1213.
—Krista McBeath
309.808.2224 3
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