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.
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.
More on US News & World Report and MSN Money
If anyone reads the U.S. Constitution you will see that SSI was NOT to be touched by our elected Government. That is a part of the Constitution that has been abused by our political junkies for years. If we do anything, we should vote on an amendment to abolish that practice. If we collected all the IOU's the government owes SSI it would be very self sufficient.
Raise the contribution to 7% and set conditions on the full retirement age.
I retired at 62. I was an metal worker and I beat the crap out of myself climbing steel and walking four inch bar joist while carrying fifty to hundred lb. sheets in the wind and snow.
I just could do it safely anymore.
I am flabbergasted at those of you who sit in an air conditioned office punching keys on a comp. tell someone who busts his or her **** in the heat and cold earning in a year what you earn in a month how I should work and how long I should work.
People complain about congress men and women and what they have to say and what they do.
Me I don't blame them for the most part.
I mostly blame the men and women on cable news chann. and news paper and blog writers.
All they do is complain and bitch when in my opinion if one set a chimp at a keyboard and let it punch keys for a week one would probably get pertly much the same story.
In my opinion, teachers, K - 8 should be the highest paid people, Base ball, basketball and foot ball the lowest and TV hosts and news paper writers a step above.
All think tank members should have to pay to be heard
I retired under Civil Service, and have since carried Blue Cross, under the FEHBP program, which costs me $185 per month. Got sick, hospitalized and became Disabled in late 2009. On recommendation of the hospital I go to, I applied for Disability Medicare (I do not receive any Social Security, nor ever will, due to being TWO credits short, and the WEP law passed by Congress in 1986 - it decimates any Social Security I could receive, because I am retired under Civil Service) - Had to fight for it in Court, which took 2 years. Medicare had NO basis by which to deny me, but I had to go through the whole shebang, and the Judge saw it my way.
I am probably the ONLY American who has to pay OUT OF POCKET, for my Medicare. $299.70 per quarter. But, I got it, and it stacks well with my Blue Cross. Here's the punchline:
MEDICARE has BETTER COVERAGE, and LOWER COPAYMENTS, than the Blue Cross that I worked 30 years for.
Now, with two stacked policies, my out-of-pocket expenses are quite low (except for prescriptions). Instead of getting whacked for $7,500 per year under Blue Cross, my deductibles and co-pays are just a few handfuls of dollars. Maybe a thousand or so each year. It pays to get all the insurance you can. But, I just wanted to point that out, to all who decry Medicare: IT'S BETTER THAN WHAT I COULD GET, THROUGH OPM, AS A RETIRED CIVIL SERVICE EMPLOYEE. Just putting it in perspective.
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