Each year, usually in October, Social Security announces whether or not the Consumer Price Index has increased resulting in a cost-of-living increase for Social Security and Supplemental Security Income beneficiaries.
Some other adjustments 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 $127,200 from $118,500. Of the estimated 173 million workers who will pay Social Security taxes in 2017, about 12 million will pay more because of the increase in the taxable maximum. Below you will find a fact sheet that gives some of the other automatic adjustments. Please note the first amount given under each topic is the 2016 rate and the second amount given is the current 2017 rate.
2017 SOCIAL SECURITY CHANGES
o Cost-of-Living Adjustment (COLA):
Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2014 through the third quarter of 2016, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 0.3 percent COLA for 2017. Other important 2017 Social Security information is as follows:
o Tax Rate:
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. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes. The tax rates shown above do not include the 0.9 percent.
o Maximum Taxable Earnings:
Social Security (OASDI only) $118,500 $127,200
Medicare (HI only) N o L i m i t
o Quarter of Coverage:
o Retirement Earnings Test Exempt Amounts:
Under full retirement age $15,720/yr. $16,920/yr.
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
The year an individual reaches full $41,880/yr. $44,880/yr.
retirement age ($3,490/mo.) ($3,740/mo.)
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.
o Social Security Disability Thresholds:
Substantial Gainful Activity (SGA)
Non-Blind $1,130/mo. $1,170/mo.
Blind $1,820/mo. $1,950/mo.
Trial Work Period (TWP) $ 810/mo. $ 840/mo.
o Maximum Social Security Benefit: Worker Retiring at Full Retirement Age:
o SSI Federal Payment Standard:
Individual $ 733/mo. $ 735/mo.
Couple $1,100/mo. $1,103/mo.
o SSI Resources Limits:
Individual $2,000 $2,000
Couple $3,000 $3,000
o SSI Student Exclusion:
Monthly limit $1,780 $1,790
Annual limit $7,180 $7,200
o Estimated Average Monthly Social Security Benefits Payable in January 2017:
0.3% COLA 0.3% COLA
All Retired Workers $1,355 $1,360
Aged Couple, Both Receiving Benefits $2,254 $2,260
Widowed Mother and Two Children $2,686 $2,695
Aged Widow(er) Alone $1,296 $1,300
Disabled Worker, Spouse and $1,990 $1,996
One or More Children
All Disabled Workers $1,167 $1,171
Information about Medicare changes for 2017 is available at www.Medicare.gov.