The Social Security Administration has announced a 1.3% rise in benefits in 2021. This is an increase even smaller than last year’s.
Cost-of-living increases are tied to the consumer price index. Therefore, a modest upturn in inflation rates and gas prices means Social Security recipients will get only a slight boost in 2021. The 1.3% increase is similar to last year’s 1.6% increase, but much smaller than the 2.8% rise in 2019. The average monthly benefit of $1,523 in 2020 will go up by $20 a month to $1,543 a month for an individual beneficiary. This results in a $240 yearly increase.
The cost-of-living change also affects the maximum amount of earnings subject to the Social Security tax, which will grow from $137,700 to $142,800.
For 2021, the monthly federal Supplemental Security Income (SSI) payment standard will be $794 for an individual. The 2021 SSI payment standard will be $1,191 for a couple.
Some years a small increase means that additional income will be entirely eaten up by higher Medicare Part B premiums. But this year, that shouldn’t be the case. The standard monthly premium for Medicare Part B enrollees is forecast to rise from $8.70 a month to $153.30. However, due to the coronavirus pandemic, under the terms of the short-term spending bill the increase for 2021 will be limited to 25 percent of what it would otherwise have been.
Most beneficiaries will be able to find out their specific cost-of-living adjustment online by logging on to my Social Security in December 2020. You can still receive your increase notice by mail. Though, you may choose whether to receive your notice online instead of on paper.
For more on the 2021 Social Security benefit levels, click here.
