Social Security Update 2021 Must Not Be Ignored, If you need to look at the updates and changes for 2021 then keep in mind that SSA announces changes in the month of October. This means the updates for 2021 were announced in October 2020 and if you have skipped them this is the place where you can get all the information by reading this article till the end. Below are the updates which are already been announced.
This data will assist you in updating your social security information.
Social Security Update 2021 Must Not Be Ignored
Retirement age status
As we already know that the age for gaining retirement social security benefits is 62. However, if you apply before 62 years then this will reduce your payout permanently. If you are turning 62 in 2020 then the full retirement age for you is going to be 66 years and 8 months. So, what is the existing law? The update about the full retirement age is now increased or set to 2 months every year until you hit 67.
In the case of 2021, you are turning 62 then the full age to gain retirement benefits for you is going to be 66 years and 10 months. This will continue until any change is made, any person who is born in the year 1960 or later in time will be able to gain their retirement SSA benefits when they will reach 67 years.
So, if you delay gaining your social security retirement then this is guaranteed that you are going to get more than your usual payouts. In fact, if you are successful in waiting till 70, you will get an a32% high payout as compared to the benefits you claim when you reach the full retirement age. After 70 there are no set parameters to delay your SSA benefits.
A 1.3% hike will be delivered in 2021
There are going to be seventy million SSA beneficiaries in 2021 who will be getting 1.3% COLA for their benefits. This adjustment is made for a reason and that is it will keep pace with current inflation and this is based on CPI-W which is calculated by the BLS.
If the consumer price index for urban wage earners and clerks increases to more than 0.1% every coming year between the 3rd quarter of the last year and the 3rd quarter of the current year, SS will increase benefits by a similar amount.
The 2021 bump of 1.3% is compared with the last year 2020 which was 1.6% COLA. In 2019, 2.8% was the COLA figure which was the highest since the year 2012. The raise amount which is 1.3% for an average social security beneficiary is going to be twenty dollars every month on an average payout of $1,543 vs. $1,523 in the year 2020.
SS disability benefits amplified
There are approximately ten million Americans who receive disability benefits and the payment is going to be increased for them as well in 2021, not a big amount but a slight hike which is definitely good for the disability beneficiaries.
If you are legally blind then you will receive a maximum amount of $2,190 which is going to be $80. For the non-blind beneficiaries, the maximum benefits are amplified to fifty dollars which is going to be the amount of $1,310.
Earning limits are also increased
There are many beneficiaries who are working and also receiving social security benefits at the same time and if you are among them then there are chances that you’re entire or a part of your social security benefits might be withheld temporarily, depending upon your earnings. However, the income limits are slightly increased for the current year.
Prior to reaching full retirement age, beneficiaries are allowed to earn up to $18,960 in the year2021. After this limit, one dollar will be deducted from the SS benefits for every two dollars that surpass the limit.
According to the the2021 yearly limit, it can be seen a $720 hike over the 2020 limit of $18,240. If you are going to be 62 in 2021 then you can earn up to $50,520, up to $1,920from the 2020 yearly limit of $48,600.
For every three dollars, you can earn to the 2021 limit, your SS benefits going to be reduced by one dollar, however, that is only applicable to income earned in the months prior to reaching the full social security retirement age. When you will reach full retirement age then no perks will be withheld even if you decide to earn.
Utmost taxable earnings rose to $142,800
In the year 2020, it was important for the employees to pay social security tax amount of 6.2% on income of $137,700. If you earn above it then it is not subject to tax. In the year 2021, the amount of tax is the same at 6.2% and it is 12.4% for those who are self-employed, but the income cap is amplified to $142,800.
The other side is that at the maximum taxable earnings are increased and so the earning amounts are utilized to calculate the retirement benefits by the social security administration. In the year2020, the monthly social security maximum benefit for retiring workers at the time of full retirement age was$3,011. In the year 2021, the maximum advantages increased by $137 every month to $3,148.
Social security beneficiaries can receive a thirty-two percent larger payout every month if they wait till the age of 70 rather than claiming them immediately after they reach their full retirement age.
The credit earning threshold goes up it is important for you to earn forty credits at least if you were born in the year 1929 which means 4 credits at maximum every year. You have to earn these credits over your working life to be qualified for social security benefits.
The sum it takes to earn a sole credit goes up somewhat every year. For the year 2021, it will take $1,470 in earnings per credit, up sixty dollars from 2020. The credit number which is required to receive disability social security benefits will depend upon your age at the time you suffered from the disability.