Changes and Updates to Social Security Regulation That You Need to Know About

Changes and Updates to Social Security Regulation

The Social Security Administration (SSA) recently announced a new costofliving adjustment (COLA) starting in 2021 that is making Palm Beach Financial Planners adjust their approach to retirement savings. Beneficiaries can expect a 1.3% increase in their income payouts next year, which is actually smaller than the COLA increase was for this year.1 For single households, that’s an average increase of about $20 a month; $33 for married retirees.2 

Changes and Updates to Social Security Regulation 

Changes to Social Security Benefits and the Implications 

Among older Americans who work and also have begun drawing Social Security benefits, the earnings limit for those younger than full retirement age will increase to $18,960, which means the SSA will deduct $1 from benefits for every $2 earned above that amount. For those who will reach full retirement age during 2021, their earnings limit increases to $50,520. For this group, on earned income that exceeds the $50,520 threshold, the SSA will deduct $1 from benefits for every $3 earned (until the month the worker turns full retirement age). Once you’ve reached full retirement age — which is based on your birthdate — there is no limit; you can earn as much as you like without it impacting your Social Security benefits.3 


What if My Retirement Income Won’t be Enough?   

If you believe your future retirement income won’t be enough to meet your needs, give us a call. We can help identify potential retirement income gaps and create a financial strategy using a variety of insurance and investment products to help you work toward your long-term goals.  

Unfortunately, more than 40% of retirees depend on Social Security benefits as their sole source of income. Without it, the number of elderly poor would increase by more than 200%. Furthermore, according to a study by the National Institute on Retirement Security, the program reduces other public assistance costs by $10 billion in a single year.4 


How Many People Use Social Security?  

Among the nation’s population of more than 328 million, 48 million receive Social Security retirement benefits. That number will continue to grow in the coming years as the large baby boomer population retires from the workforce.5 


How Does the Government Plan on Solving the Social Security Problem?

While the SSA has warned for many years that Congress must act to make changes to the program before the Social Security Trust Fund is projected to be depleted (in 15 years),6 this is a sensitive issue often avoided during election years, which come around every two years. While some conservative politicians have expressed the need to reduce benefits to reduce the nation’s deficit, that’s not a popular stance. Other proposals include increasing the maximum income subject to FICA taxes, which fund Social Security benefits; raising the retirement age; or paying benefits only to lower-income retirees.7 

Changes and Updates to Social Security Regulation

Need a Palm Beach Financial Adviser to Keep You Updated on Social Security?   

Legacy Financial Partners stays connected and on top of the latest financial trends to save you time and money. Get in touch with us today to learn more!  


Content prepared by Kara Stefan Communications. 

1 Social Security Administration. Oct. 13, 2020. “Cost-of-Living Adjustment (COLA) Information for 2021.” Oct. 29, 2020.  

2 CBS News. Oct. 13, 2020. “Social Security to pay extra $20 a month on average in 2021, one of smallest hikes ever.” Oct. 29, 2020.  

3 Social Security Administration. Oct. 13, 2020. “Cost-of-Living Adjustment (COLA) Information for 2021.” Oct. 29, 2020.  

4 Marlene SatterBenefitsPro. Jan. 23, 2020. “Social Security is the sole retirement plan of 40 percent of older Americans.” Oct. 29, 2020.  

5 Nichole MorfordBenefitsPro. Aug. 28, 2019. 10 ‘must know’ FAQs on Social Security.” Oct. 29, 2020. 

6 Kathleen Romig. Center on Budget and Policy Priorities. May 13, 2020. “What the 2020 Trustees’ Report Shows About Social Security.” Accessed Nov. 18, 2020.   

7 Josie Albertson-Grove. New Hampshire Union Leader. Oct 24, 2020. “Candidates differ on how to preserve the Social Security trust fund.” Oct. 29, 2020.  


Our firm is not affiliated with the U.S. government or any governmental agency. 


We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.  


The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. 



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