Changes are the necessity of every program. The same is true
for Social Security program in US. Every year in the month of October, the SSA
introduces the changes on a yearly basis to the program. This year also, there
are a number of changes that will take effect from the initial month of 2019,
i.e. January. There is an annual fact sheet by the SSA, which gives the
complete details about the changes that will be going to work this year. So,
start reading those changes if you are willing to become a knowledgeable
individual about the Social Security program in the United States. Here is a
glimpse:
An increase in the full retirement age will continue
When it comes to the earliest age to get the Social Security
retirement benefits, it is 62. If you claim before the normal or full
retirement age, then it will give the reduced payout on a permanent basis. People
who reach the age of 62 in 2018, then the 66 and 4 months is the full
retirement age for them. While on the other hand, if a person reaches the age
of 62 in 2019, then his or her full retirement’s age will extend to 66 and 6
months. Till the 67 age is hit, there will be an increase in the full
retirement age by 2 months every year. According to this update, if any person
is born in 1960 or later, then the 67 will be full retirement age.
In any case, if a person delays to claim the benefits of the
Social Security earlier his or her full retirement age, then he or she can get
more than the full disbursement.
Higher taxable paychecks will rise to $132900
It is a known fact that an employee was needed to pay the
Social Security tax, which is equal to 6.2% on salary up to $128400 in 2018. If
the salary is higher than this limit, then there was no need of paying the tax.
When it comes to 2019 update, the rate of the tax will be the same at 6.2%,
however, there is a change in the tax cap limit, which is extended to $132900.
It states that the higher amount of paychecks used by the
Social Security Administration to compute the retirement benefits is dependent
on the taxable maximum increase. In the previous year, the maximum benefit for
an employee retiring at full retirement age was 2788 dollars on a monthly basis.
However, this year, it will be $73 to $2861 per month.
A rise in payments to 2.8 percent for beneficiaries
This year would be great for people who will get the 2.8
percent in expenses as a beneficiary. Expenses are all about COLA (Cost of
Living Adjustment). Based on the update, it is concluded that more than sixty
seven million beneficiaries of the Social Security will receive this change. The
objective of this increase is to overcome the effect of inflation. According to
the calculation of the BLS for CPI-W, it makes sure that an individual Social
Security’s check has the same purchasing power as in the last year. If there
will be a hike in the Consumer Price Index for Urban Wage Earners and Clerical
Workers to 0.1 percent or above every year between the 3rd quarter
of the last year and the 3rd quarter of the recent year, then it
will affect the check by increasing it to the same amount.
There has been a rise of 0.8% in COLA from the last year and
it is the biggest since 2012 when Social Security benefits turned up to 3.6%. Being
an average recipient of the Social Security, this 2.8% increase will subject to
only $39 for every month. And the average payout on the monthly basis will be increased
from 1422 dollars in the last year to 1461 dollars in 2019.
The limit of earnings will increase
When you are going to collect the benefits of the Social Security
and if you are working at that time, then all or a part of the benefits will be
withheld on a temporary basis, based on your earnings. But if we see the change
in 2019, then the income limits will be extended slightly.
This update implies that before reaching the full retirement
age, a person can earn up to 17640 dollars in 2019. Afterward, the amount of $1
will be subtracted from his or her payment for every 2 dollars that goes beyond
the limit. According to the 2019 annual limit, there will be a $600 extension
in the limit of the last year, i.e. 17040. If a person reaches the full
retirement age in 2019, then he or she can earn $46920. The Social Security
benefits will be decreased by $1 per $3 earned over the limit of 2019, but
there is a condition for this, which states that it will apply only to that
money a person has earned in the months before entering the full retirement
age. Once he or she reaches the full retirement age, no Social Security
benefits will be suspended if people carry on working.
The disability thresholds will also rise
There are more than 10 million American people who apply for
disability payments of the Social Security and are eligible for it. This 2019’s
update will also make the thresholds increased. People who are legally blind
will get a maximum of 2040 dollars every month. For non-blind persons, the
higher Social Security benefit will rise $40 to $1220 every month.
These changes will start taking effect from the January
month in 2019. In addition, the COLA notice can be seen online without any
hassle.
Final verdict
Last but not least, Social Security changes in 2019 can be
proven successful and great for American people, if they completely realize them
and start making the right strategies to claim their Social Security benefits. For
more updates, you can go online and refer to the authorized website of the
Social Security Administration.
