Social Security Increase For 2021
Every year Social Security payments are adjusted for inflation. That means that in most years, there is an increase in the monthly benefit paid to people collecting Social Security. This year, retirees can expect a small increase. Social Security COLA for 2021 The Cost-of-Living Adjustment, or COLA, is calculated using an inflation index called the consumer price index, or CPI. The adjustment for the following year is set in October so that there is enough time to get everything processed. (It probably doesn’t take that long anymore, but the law says October, so that’s the way it goes.) Of course, in order to calculate the CPI, you have to have the whole month of data, so the best they can do in October is use the September number, which came out showing negative inflation. Social Security is never cut by COLA, so instead, it will stay the same for the following year. The increase from 2020 to 2021 was will be 1.3 percent. Income Cutoff for Paying Social Security 2021 The same index is used to determine how much income a current wage earner must pay for Social Security tax, sometimes called FICA on paystubs. Since the COLA adjustment for benefits …