The news is out. Our Social Security benefit increase starting in January 2021 will be less than it was for 2020.
Instead of the 1.6% increase we received this year, they’re cutting us back to 1.3% for Social Security benefits and Supplemental Security Income. For the average recipient, this comes to a whopping $20 per month. The average benefit will be $1,543 per month and $2,596 for a couple.
The retirement earnings test exempt amount will change in 2021 as well. If you’re not yet at full retirement age, the annual exempt amount will be $18,960 per year. During the first year you reach full retirement age, the limit will be $50,520 per year (before the month you reach that age).
The way this is supposed to work is that when the annual inflation rate goes down, our cost of living adjustment also goes down. We allegedly don’t need as much money to get through the month. (Although the cost of our groceries has gone up, the price of gas has gone down because no one is going anywhere now.) The Senior Citizens League guesstimated correctly a few months ago that our increase would be 1.3% — the second lowest increase ever.
Meanwhile our Medicare Part B premium continues to climb. The good news there is the “hold harmless” clause in the regulations. If the Medicare premium rises enough that it overtakes our Social Security increase, the dollar amount of the Part B premium will be reduced so we don’t end up with fewer Social Security dollars than we received this year. This applies to most but not all of us.
Keep an eye on the Senior Citizens League (seniorsleague.org). They fight for us when it comes to drug costs, veterans benefits, Medicare, Social Security and more. They’re in Alexandria, Virginia, right across the river from Washington, D.C., and the halls of Congress.
(c) 2020 King Features Syndicate, Inc.