By Donna Clements
2021 Social Security Updates
The Social Security Administration (SSA) announced beneficiaries will receive a 1.3% cost-of-living adjustment (COLA) for monthly benefits payable in 2021 (compared to a 1.6% increase in 2020). For the average retired worker, the increase is about $20 a month.
The Social Security taxable earnings base increases to $142,800 in 2021. There are about 178 million working people paying this combined 7.65% payroll tax, matched by their employers, to support these programs. See the 2021 Social Security figures compared to 2020 in the summary table.
In 2021, the full retirement age (FRA) will be 66 and 2 months for people born January 2, 1955, through January 1, 1956. For Social Security and Medicare purposes, the FRA is established on the day before an individual’s birthday. So someone born on January 1 is considered to have been born in the previous year. Some of the Social Security figures in the summary table that follows relate to when a person attains FRA.
2021 Medicare Updates
The Centers for Medicare and Medicaid Services (CMS), an agency under the Department of Health and Human Services, announced the 2021 Medicare premiums and deductibles.
The standard Part B monthly premium increases to $148.50 in 2021 for most current, new, and high-income Medicare beneficiaries and for people whose Medicare premiums are paid by Medicaid. Beneficiaries with high incomes pay additional income-related Part B premiums.
The Part D, Medicare standard prescription drug plan, premium averages $30.50 per month. These premiums are adjusted every January. Drug plan enrollment is within three months of becoming eligible for Medicare. High-income enrollees in Part D pay a premium surcharge that operates like the Part B program.
The summary tables that follow show the new 2021 Medicare figures compared to 2020.
About the Author: Donna Clements
Donna Clements is a Senior Associate at Mercer with over 30 years’ experience in Social Security and Medicare. Mercer’s more than 25,000 employees operate in over 130 countries and help you redefine the world of work, reshape retirement and investment outcomes, and unlock real health and well-being. Visit www.imercer.com/socialsecurity for more information and publications written on these topics.
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