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6 changes to Social Security in 2013

Benefit 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 Oct 16, 2012 12:23PM

This post comes from Emily Brandon at partner site U.S. News & World Report.


U.S. News & World Report logoSocial 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.


Image: Social Security Card (© Scott Speakes/Corbis)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.


More on US News & World Report and MSN Money

Oct 16, 2012 4:44PM
I think what we need to do is start a National Agenda to have ALL Congressmen and Senators be forced into having the SAME retirement AND the SAME Medical coverage that the average Americans will recieve.  Alos, their terms should be limited to no longer than 12 years in any case.  Put an amendent to that to include that they CAN NOT vote them selves a rasie until the Budget is balanced.  Lets see who has the courage to forward this.  There are 500+ people in the House and Senate that are controling our lives.  It is up to us and no one else. 
Oct 16, 2012 3:20PM
My Dad got one the first SS  cards in 1936, worked until he was 75, paid into SSI. I got my SS card when I was 16 and have worked, paid into is NOT their money, it is NOT a slush fund to pay for decade long wars or to give away to in the form of over seas aid to third word dictators.  It should NOT be scoundered by our political leaders. It is MY money, your MONEY, it is money WE paid into, so that we would have something to live on when we can NO longer work. WAKE UP PEOPLE
Oct 16, 2012 6:17PM
Lets stop giving Social Security and Medicare to people who come to our country and never worked a day or paid a tax.  
Oct 16, 2012 3:46PM
I am 46 years old and have been on social security for 12 years now, due to being attacked and injured while working as a nurse assistant. I applied for social security once and was approved; I was never denied, since I had all the proof needed to show I am truly disabled. I do not receive a huge check every month, I am very careful with what I do receive since it is barely enough to pay my rent, so I decided to go back to school, to further my education so I can get into a career I can work in and make good money, so the people who also need social security and have been denied, will be able to collect since I will no longer need to, God willing. But one thing that angered me to the core is, I was talking with a few women who are refugees from Iraq, who never worked a day here in the United States, and are now collecting more money from social security than me, who actually did pay into the system. Them receiving the money wasn't what made me angry, what made me angry was, they were complaining that it wasn't enough....IF IT'S NOT ENOUGH, GO TO WORK!!! AND IF YOU DON'T LIKE IT, GO BACK TO WHERE YOU CAME FROM AND LET THE PEOPLE WHO ACTUALLY WORKED FOR THIS MONEY, RECEIVE IT!!! I HATE ungrateful people!!!!
Oct 16, 2012 7:23PM
I am near ly 80 years old and have worked most of my life.  Just retired 5 years ago .  I have contributed to Soc. Sec for a great many years.  This is my retirement.  Social Security is not an "entitlement"   It is MY retirement.  How can these politicians keep calling SS and entitlement?  An entitlement is ,  Well fare, food stamps etc.  These are "entitlements.  And as long as I brought up the subject of " Entitlements"  I believe that ANYONE that applies for the "Entitlements" be required to be tested for drugs, and a social worker check their household (un announced) to see about the wellfare of the kids. The drug testing and the in person household check ups need to be done on a quarterly  basis.  How has the government had the bloody nerve to use our retirement savings to help other agencies?  That is stealing.  Our Land of the Free is not FREE anymore because the government has their hands in OUR pockets.  Put a lock on OUR Social Security to keep the grabby politicians out of it.  Invest OUR Social Security in to security bonds. 
Oct 16, 2012 2:48PM
why dont our goverment officials have to live off of ss like the rest of us? Why do we have to pay for their fat retierment plan? and cadillac health plan!
Oct 16, 2012 3:35PM
Some idiots call this an entitlement,....for those of you with mental deficiencies it is EARNED INCOME,.....we were FORCED to pay into the system ALL our lives.  Get it?
Oct 16, 2012 2:16PM
They usually increase the cost of your medicare. So that takes any raise you might get. I see why and_ree_uh feels cheated. I have worked since I was 16 years old and just recently retired at the age of 67. I paid into Social Security for 51 years. Had I been able to put that into a retirement account I would have been living a whole lot better than living on what the government allows. If President Johnson had left  Social Security alone and not passed a bill where the govermnent could use it as their own private piggy bank, it would not be in the shape it is in now. 
Oct 16, 2012 6:38PM
A new idea,  lets pass a law requireing tha congress and senate go on social security if they cannot complete a 30 year term.  Stop their taxpayer retirement , medical benefits by the taxpayers and no  more than 30 days vacation time, after all they arre federal emoplyees.  By doing so the social security and medicare would be setteled in a weekend
Oct 16, 2012 4:26PM
Let me see how this goes.  We get a 1.7% cola on social security and they will take away $7.00 right off the bat.  We just had our electric bill raised and our water and sewage raised.  I am sure cable will want to put in their 2 cents worth.  Then there is gas going up and all the impact it does to other things.  It reminds me of an old saying, "one step forward and two steps back".
Oct 16, 2012 3:07PM
Nobody ever mentions that people receiving Social Security have to file and pay taxes on the money they receive. Once you pay the tax on the $21.00 raise it's pretty much gone. Also, look into how our Govenment is now allowing illegals to claim Social Security. It's pretty ugly. Look up "The Senior Citizens League" for info.
Oct 16, 2012 2:53PM
The limit on income subject to the SS and Medicare tax should be eliminated.  ALL earned income AND capital gains should be taxed at the 6.2% rate.  Why should someone making 6 figures not pay fully into the system?  Oh, yea, the people making the rules all make at least 6 figures and don't want to pay their fair share.
Oct 16, 2012 5:27PM

It is Time for change at that level we agree as a nation, what are we waiting for. lets form a group and see to it that congress and senate, all begin in 2013 paying into social security and healthcare and collecting the same benifits as the rest of the nation and its citizens, These people are just employees that have used their position in office to twist laws to bennifit themselves with our money. I say it stops in 2013. if the group is formed and a website posted. lets get to fixing the thieves in congress and senate. Now

Oct 16, 2012 4:14PM

It's a pity that our Federal Government will not think twice about spending Billions upon Billions of "OUR" Dollars "WE PUT INTO" on third world countries in hopes they become our alies and thinking for these payment's of money and support  they will rush to our rescue when needed. But in reality this rarely happens if at all! (as they laugh at us for the money and support given to them by our Govt.!)


The point is our Fed Government fails and refuses to take care of their > OWN BACKYARD FIRST!> (US!) > Our Federal Governments >  #1 Responsibility!!!


Something to think about!...

Oct 16, 2012 3:32PM
WOW A WHOPPING 1.7% comes out to about $21.00  "Well book the cruise!" only to have part B medicare go up from $99.00 to $110.00  so wheres the raise? 
Oct 16, 2012 2:14PM
The increase in Medicare premiums will eat up that 1.7%.
Oct 16, 2012 4:29PM



Oct 16, 2012 3:12PM

Does anyone realize that if i were to make 1 million dollars this year that I will only be taxed on the first 110 k. Which means 890K of earnings is not taxed...... Wanna fix social security?? Dont put a cap on how much you pay in and put a cap on how much gets paid out. Social security was designed to prevent poverty and welfare. So let all put in the same percent and get back an amount that coincides with social responsibility,


Oct 16, 2012 2:49PM
I wish people would stop referring to SS as a tax, maybe for legal purposes it has to be called a tax but it's really a form of an IRA. Some who live long enough will collect more than they put in, I don't think that warrants calling it a tax. It's a forced savings plan and a very good idea. A lot of people live from check to check and would have nothing to live on if it wasn't for SS. It certainly was one of the best ideas FDR even had.
Oct 16, 2012 3:03PM
A Freebie??  I paid my share into ss for years with the promise of a monthly check once I retired.  So I believed our government.  The government used to be respected and so we trusted their assurances.  Now our children and grandchildren want to take this benefit away because they don't want to pay.  But we paid for the generation before us.  The respect for each other has been replaced by respect for the dollar.  How sad.  God help us if Obama stays in office.  He doesn't care for the American people.   
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