There are two things very likely to happen in 2021.
- No COLA applied to Social Security benefits
- An increase in Medicare Part B premiums.
Seventy percent of retirees will see no impact on their SS check because of the hold harmless provision. Simply put, your monthly benefit cannot decrease as a result of an increase in Part B premiums.
But 30% of higher income beneficiaries will not only see a decrease in their benefits, but that decrease will be higher than the actual increase in the part B premium because they must make up for Medicare’s lost revenue caused by the 70% held harmless and thus not paying the Part B premium increase.
For singles earning more than $87,000 and couples filing jointly and earning more than $174,000 there is no protection against a decrease in the Social Security benefit.
Needless to say, in our current economic environment Congress could change all this with special legislation like mandating a COLA.
There have been only three years since 1975 without a COLA.