Take-Away: On October 13, 2020, the Social Security Administration announced the cost-of-living adjustment to social security benefits to begin on January 1, 2021.

Changes for 2021:

  • Cost-of-Living Adjustment: The cost of livingĀ  increase to social security benefits will be 3% beginning January 1, 2021.
  • Medicare Premiums: The adjustment to the monthly Medicare premiums for 2021 has not yet been determined. The base Medicare premium amount will be reported in December, 2020 when social security recipients are alerted to their expected benefits for the next calendar year.
  • Maximum Earnings for SSI Contributions: The earnings ceiling under which social security payroll contributions are withheld increases from $137,700 for 2020 to $142,800 for 2021.
  • Earnings Limits for Early Recipients: If an individual commences taking social security retirement benefits prior to their full retirement age, the deduction from social security retirement benefits, a deduction/offset of $1.00 for each $3.00 earned, starts when earnings exceed $50,520. This offset/deduction will continues until the social security recipient attains their full retirement age.