Social Security Announces 1.3 Percent Benefit Increase For 2021

  • Social Security Announces 1.3 Percent Benefit Increase For 2021

Social Security Announces 1.3 Percent Benefit Increase For 2021

It sought to address the long-range problem of economic security for the aged through a contributory system in which the workers themselves contributed to their own future retirement benefit through FICA taxes by making regular payments into a joint fund.

The October 13 announcement of the 1.3% hike in benefits is in line with what most Social Security watchers expected.

Social Security payments will increase by 1.3%. In addition to several provisions for general welfare, this act created a social insurance program designed to pay retired workers age 65 or older a continuing income after retirement. For Social Security beneficiaries receiving Medicare, Social Security won't be able to compute their new benefit amount until after the Medicare premium amounts for 2021 are announced.

The full retirement age will increase to 66 and 10 months for those born in 1959.

Monthly Social Security benefits for American retirees and others will increase 1.3% next year with a cost-of-living adjustment, officials announced Tuesday. By law, Social Security benefits go up when there is an increase in the Consumer Price Index from the U.S. Department of Labor's Bureau of Labor Statistics. If prices don't increase and even fall, the COLA is zero. Most people who receive Social Security payments will be able to view their COLA notice online through their personal my Social Security account. The Medicare monthly premium is now $144.60. "But a Medicare premium increase can never give you a net loss in your Social Security payment". The Social Security tax will apply to the first $142,800 of earnings, up $5,100 from $137,700 in 2020.

The Social Security increase amounts to $20 a month for the average retired worker, according to estimates released by the Social Security Administration. Final 2021 benefit amounts will be communicated to beneficiaries in December through the mailed COLA notice and my Social Security's Message Center.