There are changes on the horizon for Social Security recipients in 2019.
No, they’re not taking this great social insurance program away, but you need to know what’s coming.
The best thing is that Social Security is one of the few public retirement programs that has inflation adjustments. As the cost of living rises, you get a bump up in your monthly benefit.
Here are the major changes for 2019, according to the AARP:
You’re Getting a Raise
Although it’s not much, it’s something. Thanks to a rising Consumer Price Index, your monthly payment will be higher next year.
“Social Security recipients will get a 2.8 percent cost-of-living adjustment (COLA) in monthly benefits beginning in January. The average individual retired Social Security beneficiary is expected to see a monthly benefit jump from $1,422 to $1,461. The estimated monthly increase is $39, or $468 a year.”
The Social Security Earnings Limit Climbs
Basically Social Security will reduce your benefits if you are still working up until your “full” retirement age, which varies according to your birth date.
“If you are between ages 62 and 66 or 67 (full retirement age) and working while receiving monthly Social Security benefits, you may now earn up to $17,640 before the Social Security Administration will deduct $1 for every $2 you earn.
In the year you turn your full retirement age, the earnings limit will be $46,920 before the agency will deduct $1 for every $3 you earn until the month you reach full retirement age. (For those born between 1943 and 1954, full retirement age is 66. It increases by two months for each year after until 67.)”
More of Your Earnings Will Be Subject to Social Security Tax
When you’re working, your wages are taxed to pay for retirement and other program benefits.
“Workers pay 6.2 percent of their earnings to fund the benefit (employers pay the same). Next year, the maximum amount of earnings subject to the Social Security tax will increase from $128,400 to $132,900.”
Work Credit Earnings Increase
Social Security bases your retirement benefit on how long you worked and how much you earned while working. It pencils in “credits” based on those two numbers.
“The earnings required for one work credit — that is, three months of Social Security coverage — edges up from $1,320 to $1,360 for 2019. You can earn up to four credits a year if you earn at least $5,440. In most cases, to qualify for benefits you’ll need a minimum of 40 credits.”
Supplemental Benefit Boosted
As separate government offering, Supplemental Security Income (SSI), pays a benefit to those who are blind or disabled and unable to earn income.
“The individual benefit grows $21 a month, from $750 to $771. The amount for couples rises $32, from $1,125 to $1,157.”
As I noted earlier, how much of a benefit you receive depends upon how old you are when you file for benefits, how much you earned over your career and what kind of benefit you receive (retirement, disability, spousal, survivor, etc.). To get an estimate, check out the Social Security site.
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