Today’s post comes from guest author Todd Bennett, from Rehm, Bennett & Moore.
Social Security benefits are slated to go up, but not by much. “The cost-of-living adjustment in Social Security for 2014 is likely to be very small, marking the fourth year in the last five that recipients receive little or no increase in benefits,” according to a recent CNNMoney article.
The American Institute for Economic Research estimates the increase to be 1.4% to 1.6%. Last year’s increase was 1.7%, and the 2012 increase of 3.6% was the only “significant rise in benefits in recent years,” according to the article.
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Today’s post comes from guest author Jon Gelman from Jon Gelman, LLC – Attorney at Law.
Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 62 million Americans will increase 1.7 percent in 2013, the Social Security Administration announced.
The 1.7 percent cost-of-living adjustment (COLA) will begin with benefits that more than 56 million Social Security beneficiaries receive in January 2013. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2012.
Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $113,700 from $110,100. Of the estimated 163 million workers who will pay Social Security taxes in 2013, nearly 10 million will pay higher taxes as a result of the increase in the taxable maximum.
Information about Medicare changes for 2013, when announced, will be available at www.Medicare.gov. For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2011 through the third quarter of 2012, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.7 percent COLA for 2013. Other important 2013 Social Security information is as follows:
Tax Rate:
2012
2013
Employee
7.65%*
7.65%
Self-Employed
15.30%*
15.30%
NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.
* The Temporary Payroll Tax Cut Continuation Act of 2011 reduced the Social Security payroll tax rate by 2% on the portion of the tax paid by the worker through the end of February 2012. The Middle Class Tax Relief and Job Creation Act of 2012 extended the reduction through the end of 2012. Under current law, this temporary reduction expires at the end of December 2012.
Maximum Taxable Earnings:
2012
2013
Social Security (OASDI only)
$110,100
$113,700
Medicare (HI only)
N o L i m i t
Quarter of Coverage:
2012
2013
Earnings needed to earn one Social Security Credit
$1,130
$1,160
Retirement Earnings Test Exempt Amounts:
2012
2013
Under full retirement age
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
$14,640/yr.
($1,220/mo.)
$15,120/yr.
($1,260/mo.)
The year an individual reaches full retirement age
NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.
There is no limit on earnings beginning the month an individual attains full retirement age.
For most workers* injured before July 1, 2011, time-loss and pension benefit payments will increase 3.6 percent based on the change in the state’s average wage, as announced by the Department of Employment Security on June 19.
The increase also applies to pension benefits paid to family members of those who died because of a work-related accident or disease.
