2/20/2013 3:15 PM ET|
7 Social Security changes for 2013
Greater online access means big changes to Social Security procedures this year. Find out what other changes have been made and how they affect you.
The Social Security Administration has implemented a variety of new rules and features for 2013. The two-year payroll tax cut has officially ended, and paper Social Security checks will soon cease to be printed. A growing number of Social Security services will also be online this year. Here's a look at some of the recent Social Security changes that go into effect this year:
Payroll tax cut ends: The temporary payroll tax cut was allowed to expire at the end of 2012. Workers who paid 4.2% of their income into the Social Security system in 2011 and 2012 have now resumed contributing 6.2% of their earnings.
Higher payroll tax cap: The payroll tax cap increased by $3,600, from $110,100 in 2012 to $113,700 in 2013. Workers who earn more than this threshold don't need to pay Social Security taxes on that income.
More online services: A trip to the Social Security office is no longer necessary to start your Social Security payments. A growing number of retirees are claiming Social Security payments online, largely thanks to an advertising campaign starring actors Patty Duke and George Takei. In 2012, workers could access their Social Security statements online for the first time, including their complete earnings history and expected payments. About 3 million people have already done so. In early 2013, Social Security added online services including the ability to access a benefit verification letter and payment history. Retirees can also change their address and add or change direct-deposit information online. "The ability to do this online, it will be a real convenience for the people who are required to have these benefit verification letters," says Social Security Commissioner Michael Astrue. "It is going to allow us to focus on the kind of conversations that we really do need to have face to face."
Reduced office hours: Social Security offices are reducing the hours they are open to the public to save money and avoid paying overtime to workers. Social Security locations nationwide have been closing 30 minutes early each day since Nov. 19, 2012, and they began closing to the public at noon every Wednesday on Jan. 2.
Paper checks will end: On March 1, the Treasury department will stop mailing paper checks to Social Security recipients. Retirees will be required to choose to have their Social Security payments either directly deposited into a bank or credit union account or loaded onto a prepaid Direct Express Debit MasterCard. "If you already have a bank account or credit union account, we encourage you, and it's our preference that you sign up for direct deposit," says Walt Henderson, the director of the electronic fund transfer strategy division at the Treasury Department. "The debit card is primarily for unbanked benefit recipients. We don't want people who already have a bank account to feel that they have to get the debit card." New Social Security beneficiaries have been required to choose an electronic payment option since May 2011, and approximately 93% of Social Security and Supplemental Security Income (SSI) payments are already being made electronically.
Higher earnings limit: People between ages 62 and 66 who work and collect Social Security benefits at the same time might have part or all of their Social Security benefit temporarily withheld. Workers between ages 62 and 65 can earn up to $15,120 in 2013, after which $1 in benefits will be withheld for every $2 of income above the earnings limit. People who turn 66 this year can earn up to $40,080, and then $1 of benefits will be withheld for every $3 earned above the limit. However, once you turn 66, the earnings limit no longer applies. And benefits may be recalculated at age 66 to reflect the withheld benefits and continued earnings.
Bigger payments: Social Security beneficiaries began receiving payments that were 1.7% larger in January. The average monthly Social Security benefit in January increased from $1,240 to $1,261 as a result of the cost-of-living adjustment.
More from U.S. News & World Report:
VIDEO ON MSN MONEY
Remember, not only did you and I contribute to Social Security but your employer did, too. It totaled 15% of your income before taxes. If you averaged only $30K over your working life, that's close to $220,500. Read that again. Did you see where the Government paid in one single penny? We are talking about the money you and your employer put in a Government bank to insure you and I that we would have a retirement check from the money we put in, not the Government. Now they are calling the money we put in an entitlement when we reach the age to take it back. If you calculate the future invested value of $4,500 per year (yours & your employer's contribution) at a simple 5% interest (less than what the govt. pays on the money that it borrows), after 49 years of working you'd have $892,919.98.
If you took out only 3% per year, you'd receive $26,787.60 per year and it would last better than 30 years (until you're 95 if you retire at age 65) and that's with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you'd have a lifetime income of $2,976.40 per month.
Another thing with me.... I have two deceased husbands who died in their 50's, (one was 51 and the other one was 59 before one percent of their social security could be drawn. I worked all my life and am drawing 100% on my own social security). Their S.S. money will never have one cent drawn from what they paid into S.S. all their lives.
THE FOLKS IN WASHINGTON HAVE PULLED OFF A BIGGER PONZI SCHEME THAN BERNIE MADOFF EVER DID.
Entitlement my foot, I paid cash for my social security insurance! Just because they borrowed the money for other government spending, doesn't make my benefits some kind of charity or handout!!
Remember Congressional benefits? --- free healthcare, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days. Now that's welfare, and they have the nerve to call my social security retirement payments entitlements?
We're "broke" and we can't help our own Seniors, Veterans, Orphans, or Homeless. Yet in the last few months we have provided aid to Haiti, Chile, Egypt and Turkey. And now Pakistan......home of bin Laden. Literally, BILLIONS of DOLLARS!!! And they can't help our own citizens in New York and New Jersey! They sure rushed to help Katrina victims in 10 days!!!!! I guess minorities have more clout!
Our retired seniors living on a 'fixed S.S. income' receive no additional federal aid nor do they get any financial breaks, while our government and religious organizations pour hundreds of billions of $$$ and tons of food to foreign countries!
They call Social Security and Medicare an entitlement even though most of us have been paying for it all our working lives, and now, when it's time for us to collect, the government is running out of money. Why did the government borrow from it in the first place? It was supposed to be in a locked box, not part of the general fund.
Sad isn't it?
The 1st thing that needs to be done with Social Security is "if you have not paid into it for 40 quarters, then you do NOT get SS or any other benefit such as SSI from the program. Why does a
person who immigrated into the us and never paid one cent get more than a person who has been paying for 20 years or more. Time to take the perks from the people who are elected . Past time for elected officials to get a retirement and medical care without paying into it.
WHAT IN HEL;L IS GOING ON OUR CONGRESS, THEY ARE ACTING LIKE A BUNCH OF CHILDREN A BUNCH OF SELF SERVING MORONS.........................
If you have read the changes as they are now mentioned you will note none of this favors the People. The government steals our money and trys to do as little as possible for the People. Check and see what our government pays themself. I hope People will wiseup and get rid of them. Let them know enough is enough.
Yes, we did receive a COL raise - along with an increase in Medicare Part B. Now we are getting our taxes raised - Thank you, Obama; while you and yours live in the lap of luxury the senior citizens of the world continue to struggle day to day, after working for so many years thinking their day would come - Guess what?? It never will!
Shame on you and all of the corrupt politicians that people with money keep putting into office so you can continue to live the high life.
THE FEDS BETTER GET HOLD OF THE CABLE STATIONS IN THIS COUNTRY. THEY ARE TAKING AWAY OUR RIGHT TO MAKE OUR OWN DECISIONS BY HIRING A BUNCH OF ON
AIR ANYALISTS WHO ARE JUST AS SELF SERVING AS THE SAME TYPES WHO ARE BUYING OFF OUR CONGRESS......
Let`s not forget it was Ronald Reagan that ramrodded a bill through congress that first
started taxing SS.It`s the truth but our right wing media forgets that.
Its starting folks. First they're taking this away. Next there will be no cash. obama is already talking about taking away the penny. they do it slow so it doesnt shock you. get ready for the new world order. dont take the mark.
You are not 100% correct. We are now paying 7.43% (times 2 -- employee and employer) on a certain amount of our income. That percentage has not always been at 7.43%. And, of that 7.43%, 1.45% (times 2) is for Medicare. So, in reality, less than 6% (times 2) is what the government has credited to your SS account.
Would you have more money if the funds were invested in an employer-own account? You bet! That is what they did in Peru.
But, the more socialistic the society is, the more the payout is "defined benefit" that ends with our death. You are correct, we should have at least a portion of the money (the employee's portion?) available to be invested in a government-approved fund -- one which is owned 100% of the employee and passes to his/her heirs on his/her death.
To Miss Davis...
The government didn't have to redeem any of those "invested funds" back in LBJ's days, since there had always been a surplus. In fact, it is that very surplus that allowed Bill Clinton to declare they he created a surplus. He never did create a surplus, but the excess of SS and Medicare collections offset his overspending that gave everyone that impression.
What is your definition of "broke?" To me, when you have more obligations that you have funds, you are broke. Now, your obligations may have a long tail and may be projections, but that is exactly what actuaries do -- they project. In reality, when the SS managers report that SS is trillions in debt ($5 - $10 trillion?), they are assuming that the present funding (on a per-person basis, at existing rates, on existing income) will continue. And, that people will continue to live at least as long as is presently expected (which is a whole lot longer than it was in 1935!).
You (6dogs) wrote: "First of all SS is not a Government Program. If SS needed some capital for a period of time the Government would not let it fail. Yes your employer pays the same amount on your SS as you do. The last I knew."
Really? It is mandated by the federal government. If you fail to make your SS contributions on behalf of your employees you go to jail. The money collected is immediately invested in the federal government. And, the federal government co-mingles that money (through that investment vehicle) with all of their other revenues to give everyone the false impression that we are not running a deficit as high as it actually is. How can you be so wrong on so many issues?
You (6dogs) wrote: "SS is supported by the working people and not Govt funded in any way. It is not breaking the country. This goes to you Tarheel. a N.C. Troll find out some facts and quit drinking Troll Aid. I'll be seeing you both real soon."
The first sentence is partially true. If you don't "work," you don't pay the tax. If you make your money off of investments (collecting rents, dividends, clipping coupons, etc.) you pay not FICA taxes. Who takes care of those people? Gee, I guess they take care of themselves. They invest in their own future.
But, since the federal government holds sway over what the FICA tax will be, when we are able to collect (at what age), and on what amount of earnings the tax will be levied, I disagree with the impression that there is no government "funding," since any shortfalls will certainly be made up by that very same government since the tax revenues are co-mingled with all other federal revenue.
It is obvious from your post that you are very liberal and have drunk the Obama KoolAid with a big smile on your face, while encouraging others to do the same.
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