Latest on Social Security

Every year this blog reports on changes, raises and news on social security. Being aware that this a program that helps so many people. Not only people that retire but people that become disabled and children of disabled parents so they can go to school and grow without wanting for their necessities. This is a program that is highly resented by those that don’t need it even though they do collect from it never the less.  The law says they can because they contributed to the plan. Social security is the largest chunk that is deducted from your paycheck each time. Your employer pay as well, that way the burden is distributed by both the worker that will get the benefits and the employer that uses the worker to run the business.

 Social Security recipients will get a 1.7 percent raise Jan. 1, Social Security announced Tuesday morning.

That's about four-tenths of a percentage point higher than the best-guess estimates had put it. That's still not a whopper of an increase, but for most people living in retirement, more is better than less. Because these increases are cumulative, it is also good retirement planning news for people a few years away from claiming.

Here's how the increase will affect various aspects of the program.

The maximum amount on which workers are taxed for Social Security will go from $110,100 to $113,700. There is no upper limit on the amount of income taxed for Medicare. Unless Congress renews the Temporary Payroll Tax Cut Continuation Act of 2011, which gave the payroll tax a 2 percent haircut, in 2013 taxes for employees will go back to 7.65 percent of income. Self-employed people pay both the worker and the employer share for a whopping total of 15.3 percent.

The amount you must earn to be credited with one quarter of Social Security coverage -- you need 40 quarters or 10 years of work  to qualify for retirement benefits -- will rise to $1,160.

The cost of living adjustment will drive up the average amount that Social Security recipients receive in 2013 to these levels:

• All retired workers, $1,261.
• Aged couple, both receiving benefits, $2,048.
• Widowed mother and two children, $2,592.
• Aged widow(er) alone, $1,214.
• Disabled worker, spouse and one or more children, $1,919.
• All disabled workers, $1,132.

The amount that a worker who has worked for 35 years, earning the maximum amount of Social Security every year, can receive at full retirement age -- 66 in 2013 -- is $2,533.

If you take Social Security before full retirement age -- between the ages of 62 and 65 -- there is a limit on the amount of payroll income you can earn without losing $1 of Social Security for every $2 of income. That cap rises in 2013 to $15,120 a year.

If you work the year you reach full retirement age, you can earn quite a bit more before switching over to Social Security. That maximum is $40,080. After that, $1 in benefits will be withheld for every $3 in earnings above the limit.

Social Security is a blessing for so many people -- especially at a time when an increasing number of retirees have no pension on which to rely.

Adam Gonzalez