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| Roosevelt Signing the Social Security Act in 1935 |
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.
The Social Security Act provides for how the COLA is calculated. To read more, please visitwww.socialsecurity.gov/cola.
2013 Social Security Changes
Cost-of-Living Adjustment (COLA):
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. |
$38,880/yr. ($3,240/mo.) |
$40,080/yr. ($3,340/mo.) |
|
Social Security Disability Thresholds:
|
2012 | 2013 |
| Substantial Gainful Activity (SGA) Non-Blind Blind |
$1,010/mo. $1,690/mo. |
$1,040/mo. $1,740/mo. |
| Trial Work Period (TWP) | $720/mo. | $750/mo. |
|
Maximum Social Security Benefit: Worker Retiring at Full Retirement Age:
|
2012 | 2013 |
| $2,513/mo. | $2,533/mo. | |
|
SSI Federal Payment Standard:
|
2012 | 2013 |
| Individual | $698/mo. | $710/mo. |
| Couple | $1,048/mo. | $1,066/mo. |
|
SSI Resources Limits:
|
2012 | 2013 |
| Individual | $2,000 | $2,000 |
| Couple | $3,000 | $3,000 |
|
SSI Student Exclusion:
|
2012 | 2013 |
| Monthly limit | $1,700 | $1,730 |
| Annual limit | $6,840 | $6,960 |
|
Estimated Average Monthly Social Security Benefits Payable in January 2013:
|
Before 1.7% COLA |
After 1.7% COLA |
| All Retired Workers | $1,240 | $1,261 |
| Aged Couple, Both Receiving Benefits | $2,014 | $2,048 |
| Widowed Mother and Two Children | $2,549 | $2,592 |
| Aged Widow(er) Alone | $1,194 | $1,214 |
| Disabled Worker, Spouse and One or More Children | $1,887 | $1,919 |
| All Disabled Workers | $1,113 | $1,132 |
