Social Security Benefits are increasing for 2021. Americans who collect Social Security will receive a 1.3% increase in their monthly payouts in 2021. The extra benefits kick in on Jan. 1.
Annual increases in Social Security are determined every year based on changes in a component of the consumer price index. Social Security recipients got a 1.6% cost-of-living adjustment in 2020, 2.8% in 2019, 2.0% in 2018 and 0.3% in 2017. These annual increases are meant to keep up with inflation.
The average retiree received a benefit of $1,514 in June 2020, meaning that the average retiree can expect to see an increase of about $20 per month.
Social Security Recipients Medicare Premiums for 2021
Congress has made a move to head off a potential premium spike for some Medicare beneficiaries. As part of a short-term government funding bill passed by the Senate any increase in Medicare Part B premiums for 2021 would be capped at 25% of what it otherwise would be for 2021.
While it’s still uncertain what the standard premium would be for 2021 — it is based on an actuarial formula and typically revealed in early November for the next year. Estimates are unusual this year due to the economic upheaval from the coronavirus pandemic. Early estimates would have most people pay $153.30 per month for Medicare Part B in 2021. This increase is 6% higher than the $144.60 per month for 2020. However, the impacts of Covid-19 were unknown and therefore could not be factored into the estimates.
Social Security benefits are increasing by 1.3% in 2021, which will cover the increase in premiums for most people. Premiums are increased for higher- income beneficiaries—those with adjusted gross income plus tax-exempt interest income of more than $88,000 if single or $176,000 if married filing jointly. These beneficiaries will continue to see the income limits adjust to general price inflation annually.
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