Social Security Increase, Changes Released
Monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 63 million Americans will increase 1.5 percent in 2014, the Social Security Administration announced today.
The 1.5 percent cost-of-living adjustment (COLA) will begin with benefits that more than 57 million Social Security beneficiaries receive in January 2014. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2013.
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 $117,000 from $113,700. Of the estimated 165 million workers who will pay Social Security taxes in 2014, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.
Information about Medicare changes for 2014 is available at www.Medicare.gov.
The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.
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2014 SOCIAL SECURITY CHANGES
o Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2012 through the third quarter of 2013, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.5 percent COLA for 2014. Other important 2014 Social Security information is as follows:
o Tax Rate:
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. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.
o Maximum Taxable Earnings:
Social Security (OASDI only) $113,700 $117,000
Medicare (HI only) N o L i m i t
o Quarter of Coverage:
o Retirement Earnings Test Exempt Amounts:
Under full retirement age $15,120/yr. $15,480/yr.
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
The year an individual reaches full $40,080/yr. $41,400/yr.
retirement age ($3,340/mo.) ($3,450/mo.)
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.
o Social Security Disability Thresholds:
Substantial Gainful Activity (SGA)
Non-Blind $1,040/mo. $1,070/mo.
Blind $1,740/mo. $1,800/mo.
Trial Work Period (TWP) $ 750/mo. $ 770/mo.
o Maximum Social Security Benefit: Worker Retiring at Full Retirement Age:
o SSI Federal Payment Standard:
Individual $ 710/mo. $ 721/mo.
Couple $1,066/mo. $1,082/mo.
o SSI Resources Limits:
Individual $2,000 $2,000
Couple $3,000 $3,000
o SSI Student Exclusion:
Monthly limit $1,730 $1,750
Annual limit $6,960 $7,060
o Estimated Average Monthly Social Security Benefits Payable in January 2014:
1.5% COLA 1.5% COLA
All Retired Workers $1,275 $1,294
Aged Couple, Both Receiving Benefits $2,080 $2,111
Widowed Mother and Two Children $2,583 $2,622
Aged Widow(er) Alone $1,225 $1,243
Disabled Worker, Spouse and $1,914 $1,943
One or More Children
All Disabled Workers $1,131 $1,148