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Social Security Benefits to Increase by 1.3 Percent in 2021

AAFCPAs Wealth Management would like to make clients aware that the Social Security Administration announced that Social Security and Supplemental Security Income (SSI) benefits for nearly 70 million Americans will increase 1.3 percent in 2021. Cost-of-living adjustments (COLA) have averaged 1.4 percent in the past decade.

The 1.3 percent cost-of-living adjustment will begin in January 2021. Increased payments to SSI beneficiaries will begin on December 31, 2020.

The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $142,800. The earnings limit for workers who are younger than “full” retirement age will increase to $18,960. The earnings limit for people reaching their “full” retirement age in 2021 will increase to $50,520. There is no limit on earnings for workers who are “full” retirement age or older for the entire year.

Medicare premiums (which often are deducted from Social Security) has not been announced yet. As part of a recent short-term funding bill, Congress capped how much Medicare premiums can increase to 25% of what they would have increased in a normal year.

If you have questions, please contact: Jonathan Bloom, CFP®, AIF® at 774.512.4081, jbloom@nullwealth.aafcpa.com, or your AAFCPAs Wealth Advisor.

This commentary on this website reflects the personal opinions, viewpoints and analyses of the AAFCPAs Wealth Management, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by AAFCPAs Wealth Management, LLC or performance returns of any AAFCPAs Wealth Management, LLC client. The views reflected in our commentaries are subject to change at any time without notice. Nothing on this page constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. AAFCPAs Wealth Management, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

About the Author

Jonathan Bloom
Jonathan is an experienced and passionate Investment Advisor and Financial Planner with a commitment to independent client-centric advice.  He has proven success earning trust advising nonprofits & foundations, high-net-worth individuals and retirement plan clients. He provides objective, customized solutions and a comprehensive approach to wealth management, which includes: estate, tax, retirement, insurance, college and cash flow planning. Jonathan appreciates that clients place trust in our team, and that each client is unique. In response, he works diligently to understand each client’s individual needs, life circumstances, priorities, and goals and then sets clear financial objectives and a plan to achieve them.