Social Security in 2013

Adapted from Emily Brandon’s post on U.S. News and World Report, this article explains the six changes for Social Security recipients in 2013.

•            Monthly payments will be increased at a rate of 1.7% with the average check expected to increase by $21, from $1,240 to $1,261. For couples, their benefit payments will increase from an average of $2,014 to $2,048.

•            The payroll tax cut is scheduled to expire at the end of December with workers paying an additional 2% of their income into the Social Security system. This is an increase from 4.2% in 2012 to 6.2% in 2013.

•            There is a higher Social Security tax cap and about ten million people will be paying higher taxes in 2013 due to the increased taxable maximum. The maximum amount is increasing from $110,100 in 2012 to $113,700 in 2013.

•            There is an increased earnings limit for retirees who work and collect Social Security benefits at the same time. Before any portion of their Social Security payment will be withheld they will be able to earn an additional $480 next year.

⁃            Recipients younger than full retirement age: Can earn up to $15,120 after which $1 of every $2 earned will be temporarily withheld from their Social Security payments.

⁃            Retirees turning 66 in 2013: The limit is $40,080 after which $1 of every $3 earned will be withheld.

⁃            Full retirement age: You can earn any amount without penalty and collect Social Security benefits at the same time. Monthly payments will be adjusted to reflect your continued earnings and any benefits that were withheld.

•            The maximum possible benefit grows. The maximum possible Social Security benefit for a worker who begins collecting benefits at full retirement age will be $2,533 in 2013, which is up from $2,513 in 2012.

•            Paper checks will end on March 1, 2013 meaning that all federal benefit recipients can only receive their payments via direct deposit to a bank or credit union account or loaded onto a Direct Express Debit MasterCard. The U. S. Treasury will not mail paper checks to Social Security beneficiaries. Retirees who do not choose an electronic payment option by March 1st will receive their payments loaded onto a prepaid debit card. Most recipients already receive their benefit payments electronically and new recipients have been required to choose an electronic payment option since 2011.

You can read up on Social Security changes at http://money.msn.com/retirement/article.aspx?post=b644e696-e528-477b-a931-a5be2479d922