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1.3% COLA Benefit Increase for 2021 | Social Security

Author: U.S. Social Security Administration(i) : Contact: www.ssa.gov

Published: 2020-10-13

Synopsis and Key Points:

U.S. Social Security Administration announces Social Security and Supplemental Security Income (SSI) benefits for Americans to increase 1.3 percent in 2021.

Most people who receive Social Security payments will be able to view their COLA notice online through their personal my Social Security account.

The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor's Bureau of Labor Statistics.

Main Digest

United States of America (U.S.A.) Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 1.3 percent in 2021, the U.S. Social Security Administration announced today (13/10/2020).

Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $142,800 from $137,700.

Social Security and SSI beneficiaries are normally notified by mail starting in early December about their new benefit amount.

Most people who receive Social Security payments will be able to view their COLA notice online through their personal my Social Security account. People may create or access their my Social Security account online at www.socialsecurity.gov/myaccount

Information about Medicare changes for 2021, when announced, will be available at www.medicare.gov

For Social Security beneficiaries receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2021 are announced.

Final 2021 benefit amounts will be communicated to beneficiaries in December through the mailed COLA notice and my Social Security's Message Center.

Fact Sheet: 2021 U.S. Social Security Changes

U.S. Cost-of-Living Adjustment (COLA)

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2019 through the third quarter of 2020, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.3 percent COLA for 2021.

Other important 2021 Social Security Information:

Tax Rate20202021
Employee 7.65% 7.65%
Self-Employed 15.30% 15.30%

NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.

20202021
Maximum Taxable Earnings
Social Security (OASDI only) $137,700 $142,800
Medicare (HI only) No Limit
Quarter of Coverage
$1,410 $1,470
Retirement Earnings Test Exempt Amounts
Under full retirement age $18,240 Year
($1,520 Month)
$18,960 Year
($1,580 Month)
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
The year an individual reaches full retirement age $48,600 Year
($4,050 Month)
$50,520 Year
($4,210 Month)
NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.
Beginning the month an individual attains full retirement age None
20202021
Social Security Disability Thresholds
Substantial Gainful Activity (SGA)
Non-Blind $1,260 Month $1,310 Month
Blind $2,110 Month $2,190 Month
Trial Work Period (TWP) $910 Month $940 Month
Maximum Social Security Benefit: Worker Retiring at Full Retirement Age
$3,011 Month $3,148 Month
SSI Federal Payment Standard
Individual $783 Month $794 Month
Couple $1,175 Month $1,191 Month
SSI Resource Limits
Individual $2,000 $2,000
Couple $3,000 $3,000
SSI Student Exclusion
Monthly limit $1,900 $1,930
Annual limit $7,670 $7,770
Estimated Average Monthly Social Security Benefits Payable in January 2021
Before 1.3% COLAAfter 1.3% COLA
All Retired Workers $1,523 $1,543
Aged Couple, Both Receiving Benefits $2,563 $2,596
Widowed Mother and Two Children $2,962 $3,001
Aged Widow(er) Alone $1,434 $1,453
Disabled Worker, Spouse and One or More Children $2,195 $2,224
All Disabled Workers $1,261 $1,277

(i)Source/Reference: U.S. Social Security Administration. Disabled World makes no warranties or representations in connection therewith. Content may have been edited for style, clarity or length.

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