COLA increase is 1.3 percent for 2021
SOCIAL SECURITY
Social Security payments will grow by 1.3 percent in 2021, and the program will also be adjusted in several important ways that could affect Social Security payments received or how much people pay into the system. Here’s a closer look: Social Security payments will increase The average Social Security benefit for retired workers is expected to climb by $20 to $1,543 per month as a result of the cost-of-living adjustment.
Married couples in which both spouses receive benefits will see an estimated $33 increase to an average payment of $2,596 per month in 2021.
The maximum possible Social Security benefit for someone who retires at age 66 will be $3,148 in 2021, up $137 from 2020.
Social Security payments are adjusted each year to keep pace with inflation, as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers.
The 1.3 percent Social Security costof- living adjustment for 2021 is down from 1.6 percent in 2020.
Previous Social Security COLAs have ranged from zero in 2010, 2011 and 2016 to 14.3 percent in 1980. Social Security earnings limits climb
Social Security beneficiaries who continue to work will be able to earn $720 more in 2021 before part of their Social Security benefit is temporarily withheld. Social Security recipients age 65 and younger can earn up to $18,960 in 2021 before a benefit dollar is withheld for every $2 earned above the limit. In the year you turn your full retirement age, the Social Security earnings limit climbs to $50,520, up $1,920 from 2020, and the penalty declines to $1 withheld for every $3 in excess earnings.
An older Social Security full retirement age
People who will turn 62 in 2021 will need to wait until an older retirement age than existing Social Security beneficiaries to claim their full retirement benefit. The full retirement age for those born in 1959 is 66 and 10 months, two months older than the full retirement age of 66 and 8 months for those born in 1958. The full retirement age increases in two-month increments for those born between 1955 and 1959 until it reaches age 67 for everyone born in 1960 or later.
Workers who claim Social Security before their full retirement age receive reduced payments, and those with an older retirement age experience bigger reductions. In 2021, people who elect to take benefits at age 62 will see a 29.17-percent reduction of their full retirement age benefit, according to the Social Security Administration. Those with an older full retirement age also have less opportunity to increase their Social Security payments via delayed claiming.
