Yesterday, the Social Security Administration announced the cost-of-living adjustment (COLA) for 2021. The increase will be 1.3%, which is in line with expectations based on consumer price index data. The 1.3% bump applies to about 70 million Americans who receive Social Security and Supplemental Security Income benefits.
In 2021, the estimated average monthly benefit will increase by $20 for retirees and by $16 for disabled workers. The maximum amount of wages taxed for Social Security will be boosted by about $5,000 next year.
The Social Security COLA for 2021 is a bit smaller compared to recent years. The increase was 1.6% for 2020 and 2.8% for 2019. In 2010, 2011, and 2016, however, the COLA was zero. Since 2010, the COLA has averaged a 1.4% increase per year.
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