You need to convert age1 into int first, so it can do the minus. After that turn the result back to string for display:
name1 = raw_input("What's your name? ")
age1 = raw_input ("how old are you? ")
twentyone = str(21 - int(age1))
print "Hi, " + name1+ " you will be 21 in: " + twentyone + " years."