Politics & Government
Social Security Benefits Rising 3.6%
...But increase may be partially or completely offset by increases in Medicare premiums.
An announcement from the SSA:
Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012, the Social Security Administration announced today.
The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012.
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Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.
Some other changes that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $110,100 from $106,800.
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Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.
Information about Medicare changes for 2012, when announced, will be available at www.Medicare.gov.
For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.
The Social Security Act provides for how the COLA is calculated. To read more, please visit www.socialsecurity.gov/cola.
Cost-of-Living Adjustment (COLA): Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2008 through the third quarter of 2011, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 3.6 percent COLA for 2012. Other important 2012 Social Security information is as follows:
Tax Rate: 2011 2012 Employee 7.65%* 7.65% Self-Employed 15.30%* 15.30% NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings. * Section 601 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced, for wages and salaries paid in calendar year 2011 and self-employment income in calendar year 2011, the OASDI payroll tax by 2 percentage points, applied to the portion of the tax paid by the worker and the self-employed individual. Maximum Taxable Earnings: 2011 2012 Social Security (OASDI only) $106,800 $110,100 Medicare (HI only) N o L i m i t Quarter of Coverage: 2011 2012 Earnings needed to earn one Social Security Credit $1,120 $1,130 Retirement Earnings Test Exempt Amounts: 2011 2012 Under full retirement age NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit. $14,160/yr.($1,180/mo.) $14,640/yr.
($1,220/mo.) The year an individual reaches full retirement age NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit. There is no limit on earnings beginning the month an individual attains full retirement age. $37,680/yr.
($3,140/mo.) $38,880/yr.
($3,240/mo.) Social Security Disability Thresholds: 2011 2012 Substantial Gainful Activity (SGA)
Non-Blind
Blind
$1,000/mo.
$1,640/mo.
$1,010/mo.
$1,690/mo. Trial Work Period (TWP) $720/mo. $720/mo. Maximum Social Security Benefit: Worker Retiring at Full Retirement Age: 2011 2012 $2,366/mo. $2,513/mo. SSI Federal Payment Standard: 2011 2012 Individual $674/mo. $698/mo. Couple $1,011/mo. $1,048/mo. SSI Resources Limits: 2011 2012 Individual $2,000 $2,000 Couple $3,000 $3,000 SSI Student Exclusion: 2011 2012 Monthly limit $1,640 $1,700 Annual limit $6,600 $6,840 Estimated Average Monthly Social Security Benefits Payable in January 2012: Before
3.6% COLA After
3.6% COLA All Retired Workers $1,186 $1,229 Aged Couple, Both Receiving Benefits $1,925 $1,994 Widowed Mother and Two Children $2,455 $2,543 Aged Widow(er) Alone $1,143 $1,184 Disabled Worker, Spouse and One or More Children $1,826 $1,892 All Disabled Workers $1,072 $1,111
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