The 2019 Social Security Changes: What will the 2019 COLA increase mean for eligible Social Security beneficiaries?
On October 11th, it was confirmed there would be a 2.8% increase in 2019 Social Security benefits, the largest cost-of-living (COLA) adjustment since 2012. For the tens of millions who rely on Social Security benefits, this means significant changes to come in 2019 and beyond. Below are some of the key benefit adjustments explained. Approximately two-thirds of elder Americans rely on Social Security, as it is their primary source of reported income. For millions of retirees, this 2.8% increase in 2019 monthly benefit payments is considerable. At an approximate $40 per month, this Social Security 2019 increase will provide a modest, but welcome, bump in cash flow.
As well, for the 8 million Americans receiving Supplementary Security Income (SSI), in addition to Social Security, there will also be a 2.8% increase in 2019 SSI benefits; more specifically, this 2019 SSI benefit increase results in $771 for eligible individuals, $1,157 for eligible spouses, and $386 for essential persons.
Social Security 2019 and Taxable Earnings: How will the 2019 maximum income taxed by social security be adjusted?
For those currently employed and paying into social security benefits, there is a noteworthy 3.5% increase in maximum taxable earnings. The 2019 maximum income subject to Social Security tax will adjust from $128,400 to $132,900. By the end of 2019, employees in these higher income brackets will pay, on average, an added $4,500 in Social Security contributions. The 12.4% income tax rate will remain unchanged, with employee and employer each paying their share of 6.2%.
Social Security 2019 and Retirement: How much will the full retirement age increase in 2019?
In 2019, 62 remains the youngest age one can receive Social Security benefits. However, there is continued increase in what constitutes a full retirement age with maximized benefits. This year, full retirement benefits range from 65 to 67 years-old, depending on the specific year and date of birth. As ever, the longer one waits to claim Social Security benefits, the more funds will be available in later years. To illustrate this more clearly, if Social Security benefits are claimed age 62, there is a 30% reduction in the benefit amount; at age 66, Social Security benefit reduction drops drastically to 6.7%. Further, If one keeps working through age 70, those continued Social Security contributions result in a 75% larger benefit payment than at age 62.
Social Security Benefits and Post-Retirement Income: How much can be earned while on Social Security in 2019?
For many retirees, it is essential to earn supplemental income while receiving Social Security benefits. In 2019, there is an increase in allowed maximum earnings, adjusting the income cap from $45,360 to $46,920 annually.
Social Security Benefits and Our Future: What’s next?
For years, the Social Security program has been a crucial, often temperamental talking point in government negotiations. Time will tell how this vital resource will evolve, but experts continue to advise wise investments, interest-building savings accounts, and other means to best prepare for retirement age.
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