Social Security Beneficiaries To Receive 1.3% COLA In 2021
The Social Security Administration (SSA) today announced the cost of living adjustment (COLA) will be 1.3% in 2021. This is slightly lower than the 1.6% increase applied to benefits this year, and significantly lower than 2.8% and 2.0% the prior two years. Click here for a history of COLAs since 1975.
The average monthly SSDI benefit will increase to $1,277 from $1,261, an increase of $16 (or $192 annually), according to SSA. The COLA is based on third-quarter results reported by the U.S. Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The amount of earnings subject to Social Security tax, or taxable maximum, will increase to $142,800 from $137,700 in 2021. The SSA outlines additional details in its Fact Sheet.
Other amounts will change, including:
- Substantial gainful activity (SGA). The monthly threshold for non-blind individuals will increase to $1,310 per month from $1,260 per month. For blind workers, it will increase to $2,190 per month from $2,110 per month.
- Quarter of coverage. Earnings required for a quarter of coverage increases to $1,470 from $1,410. This refers to the amount of earnings required, per quarter, to receive insured status for retirement and disability benefits.
- Trial Work Period (TWP). The monthly TWP threshold increases to $940 per month from $910 per month.
The increase takes effect in January 2021 for 70 million Social Security beneficiaries.
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