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Social Security Updates You Need to Know For 2021 Thumbnail

Social Security Updates You Need to Know For 2021

Social Security benefits rose by 1.3% from 2020 to 2021, which means average monthly increases of about $20 for individuals, $33 for married couples, and $16 per disabled worker.

The maximum benefit in 2021 for people retiring at normal retirement age — around 66 — is $3,148 a month -- which is almost $38,000 a year. 

During 2021, earnings subject to payroll tax have increased from $137,700 to $142,800.

The earnings test for filing early has increased from $18,240 to $18,960 per year. 

Meaning that every $2  you earn above that amount this year will result in $1 of Social Security benefits being withheld.

If this is the year you reach full retirement age, the cap on your earnings rises to $50,520, with every $3 earned above that amount resulting in $1 of benefits being withheld. 

Keep in mind that withheld benefits will gradually be restored in the form of higher Social Security payments after you reach full retirement age (FRA). 

People in need of cash might want to claim early, even while they have some earnings, however, for the most part, I've found that waiting to start is good advice for most seniors. 

Studies have shown that 96% of Americans aren't filing at the right time to receive their optimal Social Security benefits. Meaning they’re not getting as much money as possible over their lifetime, leaving an average of $110,000 on the table, per household.

That's a lot of money most people could put to good use during their retirement!

We have a saying in the office, "The MATH will show the PATH!"

Take the time to model multiple retirement scenarios for your household (or have your financial professional help you with this critical piece) so you make mathematically sound decisions to figure out what claiming strategy will work best for you and your family.