Social Security Changes Coming in 2019
If you are receiving Social Security benefits, there is some good news for you – your checks will be 2.8 percent bigger in 2019. The program will also be adjusted in a number of other ways next year that could affect who much you receive or how much you pay into the system. In this article our Long Beach Social Security attorneys explain these important changes that are coming to Social Security benefits in 2019.
Larger Social Security Payments in 2019
Social Security payments are adjusted each year to keep pace with inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers. The goal is for your Social Security payment to have the same buying power in year 30 of your retirement as it had in year one.
Social Security payments differ from year to year. For instance, in 2018, there was a 2 percent increase in payments. Previous benefit increases have ranged from zero in 2010, 2011 and 2016 to 14.3 percent in 1980.
The cost-of-living adjustment (COLA) scheduled for 2019 is 2.8 percent, the largest increase since 2012. This means that the average Social Security benefit for single retired workers could increase by $39 to $1,461 per month. Married couples where both spouses receive benefits could see an increase of $67 to $2,448. The increase will show up in January of 2019.
A Higher Social Security Tax Cap
In 2018, employees had to pay a 6.2% Social Security tax on income up to $128,400. Anything earned above that amount was not subject to the tax. In 2019, the 6.2% tax rate remains the same, but the tax cap will increase to $132,900. Of course, as the taxable maximum increases, so does the maximum amount of earnings used by the SSA to figure your retirement benefits. In 2018, the maximum monthly Social Security benefit for a worker who retired at full retirement age was $2,788. In 2019, the maximum benefit will increase $73 per month to $2,861.
An Older Full Retirement Age for Social Security
You can only collect 100% of your Social Security benefits if you wait until your “full retirement age” to claim those benefits. If you retire earlier, your Social Security benefit will be reduced. The full retirement age is based on the year you were born. For people born after 1954, it increases by two months every year from age 66 to 67. In 2018, the full retirement age was 66 and four months. In 2019, the full retirement age is increased by two months. That means for people turning 62 in 2019, the full retirement age will be 66 and 6 months. The full retirement age will further increase in 2-month increments over the next two years until it reaches age 67 for everyone born in 1960 or later.
Workers who claim Social Security before their full retirement age receive reduced payments. You can still file as early as age 62, but the reduction for taking benefits prior to full retirement age is greater.
Bigger Earnings Limits for Social Security Recipients
If you work while collecting Social Security benefits, you will be glad to know that income limits are increasing slightly in 2019. Of course, if you have reached full retirement age, no benefits will be withheld if you continue working. However, if you have not, these changes will apply to you. If you have not yet reached full retirement age, you can earn up to $17,640 (up from $17,040 in 2018). After that, $1 will be deducted from your payment for every $2 that exceeds the $17,640 limit. If you reach full retirement age in 2019, you can earn $46,920 (a $1560 increase from 2018’s $45,360 annual limit). For every $3 earned over $46,920, your Social Security benefits will be reduced by $1, but it will only apply to what you’ve earned in the months prior to hitting full retirement age.
Maximizing your Social Security benefits is extremely complex, and our Long Beach Social Security attorneys are available to explain these important changes or answer other questions you may have to be sure you understand how to make the most of your retirement.
Long Beach Social Security Attorneys
If you or a loved one is unable to work due to a disabling injury, medical condition or disease our skilled and experienced Social Security attorneys are here to help you get the maximum Disability benefits for which you qualify.
The Law Office of Cantrell Green is a group of highly qualified and experienced disability attorneys who have obtained millions of dollars in Social Security Disability benefits for thousands of clients in Long Beach, Orange County and the greater Los Angeles. Our Social Security attorneys care about every client, and fight tirelessly to obtain the benefits you deserve.