Each year the Social Security Administration makes adjustments to how they calculate benefits based on several factors, including changes in the cost of living. These changes have a significant effect on how much money a recipient can collect in benefits. 2021 is no different; here are a few of the changes in Social Security benefits you can expect to see:
- This year’s cost-of-living-adjustment (COLA) means a 1.3% increase in monthly benefits. Beneficiaries will start receiving the increased benefits in early January of 2021.
- As in previous years, there will be an increase in the full retirement age — the age a person has to reach before they qualify to receive the maximum amount of Social Security benefits. Currently, the minimum age to start claiming Social Security retirement benefits is 62. So, if you were born in 1959, you will be eligible to begin receiving benefits beginning this year. However, claiming benefits before reaching full retirement age means accepting a permanent reduction in monthly payouts. If you were born in 1959, you’d have to wait until you’re 66 years and ten months old before you reach full retirement age.
- The full retirement age will continue to increase until it peaks at age 67 in 2022 for anyone born in 1960 or later.
- Starting next year, the maximum possible Social Security monthly benefits for someone who retires at full retirement age will be $3,148 in 2021, up $137 from 2020.
- In 2021 the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $142,800, 3.7% higher than 2020’s max of $137,700.
- Income thresholds — the amount of money a beneficiary can earn before their benefits are reduced — will increase in 2021. If you turn 62 this year and opt to begin receiving benefits before you hit full retirement age, you will only be able to earn up to $18,960 a year before your benefits are reduced. If you reach full retirement age (66 years/10 months) in 2021, the amount of money you can earn through work while still receiving full benefits will increase to $50,520; there are no limits on earnings if you are already at full retirement age or older in 2021.
- The same goes for those who collect Social Security Disability Insurance benefits. In 2021, a non-blind disabled worker will be able to earn up to $1,310 a month before losing their benefits — $600 more than 2020; blind workers will be able to earn up to $2190 a month before losing their benefits — up $960 from 2020.
- Work credits are required to receive Social Security benefits. American workers can earn a maximum of four work credits a year. Currently, you have to earn 40 work credits to qualify to receive benefits.
- The cost of earning a work credit will increase in 2021; it’ll take $1,470 in earned income to earn one-lifetime work credit, up from $1,410 in 2020.
Are You Receiving the Full Benefits You Deserve?
The Social Security Administration pays benefits to individuals who have become too disabled to work. If a severe medical condition prevents you from working, you may qualify for disability benefits from the Social Security benefits.
Board-certified Social Security attorney M. Stanley Whitehead has helped disabled workers all over the country obtain the full Social Security disability benefits they are entitled to, even when their initial claims have been denied. Call the law offices of M. Stanley Whitehead to schedule a free, no-obligation initial consultation to discuss your case with one of Houston’s most experienced and successful Social Security disability attorney.