For
those of you who may not have seen this article, there are several Social
Security Changes that may affect you - so here's the scoop to help you stay
informed...
Social Security recipients will get a small
increase next year, and the maximum amount of earnings subject to the Social
Security tax will rise - By MSN Money partner 10/16/2012-This post comes
from Emily Brandon at partner site U.S. News & World Report.
Social
Security recipients will get slightly bigger checks in 2013. The Social
Security Administration also recently announced several other ways the program
will be tweaked in the coming year. Here's
a look at the Social Security changes workers and retirees will experience next
year:
Bigger
monthly payments. Social Security payments will increase by 1.7% in 2013. That's
considerably less than the 3.6% cost-of-living adjustment retirees received in
2012. Social Security payments are adjusted each year to reflect inflation as
measured by the Consumer Price Index for Urban Wage Earners and Clerical
Workers. Previous inflation adjustments have ranged from zero in 2010 and 2011
to 14.3% in 1980. The average Social Security check is expected to increase by
$21 as a result of the change, from $1,240 to $1,261 in 2013. Couples will see
their benefit payments grow from an average of $2,014 to $2,048.
Payroll
tax cut scheduled to expire. Workers will pay 6.2% of their income into the Social Security system
in 2013, up from 4.2% in 2012. The temporary payroll tax cut expires at the end
of December under current law.
Higher
Social Security tax cap. The maximum amount of earnings subject to Social Security taxes will
be $113,700 in 2013, up from $110,100 in 2012. About 10 million people will pay
higher taxes as a result of the increase in the taxable maximum.
Increased
earnings limit. Retirees who work and collect Social Security benefits at the same
time will be able to earn $480 more next year before any portion of their
Social Security payment will be withheld. Social Security recipients who are
younger than their full retirement age (66 for those born between 1943 and
1954) can earn up to $15,120 in 2013, after which $1 of every $2 earned will be
temporarily withheld from their Social Security payments.
For retirees
who turn 66 in 2013, the limit will be $40,080, after which $1 of every $3
earned will be withheld.
Once you turn
your full retirement age, you can earn any amount without penalty and collect
Social Security benefits at the same time. At your full retirement age your
monthly payments will also be adjusted to reflect any benefits that were
withheld and your continued earnings.
Maximum
possible benefit grows.
The maximum possible Social Security benefit for a worker who begins collecting
benefits at their full retirement age will be $2,533 in 2013, up from $2,513
per month in 2012.
Paper
checks will end. The
U.S. Treasury will stop mailing paper checks to Social Security beneficiaries
on March 1. All federal benefit recipients must then receive their payments via
direct deposit to a bank or credit union account or loaded onto a Direct
Express Debit MasterCard.
Retirees
who do not choose an electronic payment option by March 1 will receive their
payments loaded onto a prepaid debit card. Most people already receive their
benefit payments electronically, and new Social Security recipients have been
required to choose an electronic payment option since 2011.
