Over 70 million Americans rely on Social Security benefits. Even with the most careful financial planning, we all have to consider lifestyle choices, family obligations, and increases in the cost of living when we plan for the future. There are some changes we can make to prepare for retirement, but some things are out of our control. The good news is that the Social Security Administration has announced a cost of living increase for 2021.
Starting in 2021, Social Security recipients will see a 1.3% increase in their benefits. While this equates to about $20 per month for most retirees, every dollar counts on a limited income. We have all noticed higher costs in some basic items due to COVID-19, including groceries. This increase in Social Security benefits may help pay for much needed items or extra charges related to products that have been harder to get during the global pandemic. Individuals receiving Social Security disability benefits will see an increase of approximately $16 per month.
Many people receive Social Security benefits upon retiring, based on taxes they paid while working. Whether you wait for your full retirement age, decide to accept benefits early, or delay your benefits will depend on your personal circumstances. For those born after 1960, full retirement age is now 67. If you choose to delay your benefits past 67 years of age, your benefits will continue to increase until you turn 70 years old. There are no increases in benefits beyond age 70.